A monopolist who has a horizontal ATC schedule and charges the same monopoly price to all buyers
A. does not lower the amount of consumer surplus that buyers have compared with what they would have if instead they faced a perfectly competitive firm.
B. appropriates more consumer surplus as profit than a perfect price discriminator does.
C. appropriates less consumer surplus as profit than a perfect price discriminator does.
D. appropriates less consumer surplus as profit than a perfectly competitive firm does.
Answer: C
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Suppose that in a certain nation the flat income tax rate of 40 percent is reduced to 35 percent and as a result the tax base falls from $400 billion to $375 billion. As a result, tax revenues __________, indicating the nation is on the __________ portion of its Laffer curve
A) rise; upward-sloping B) rise; downward-sloping C) fall; upward-sloping D) fall; downward-sloping
According to the graph showing rational expectations and the AD/AS model, expansionary policies will cause ______.
a. a move to a lower point on the short-run aggregate supply curve
b. a move to a higher point on the short-run aggregate supply curve
c. the short-run aggregate supply curve to shift to the left
d. the short-run aggregate supply curve to shift to the right
Which of the following events would cause a shift to the right in the supply curve?
(A) The manufacturer lowers the price of its candy bars. (B) The plant shuts down for several weeks because there's been a fire. (C) A candy bar manufacturer raises the price of its candy bars. (D) Upgrades to its mixing equipment allow the plant to make more bars.
The actual price level is assumed to be constant along a given short-run aggregate supply curve.
a. true b. false