Which of the following statements for a monopolistic competitor in long-run equilibrium is true?
A. (P = ATC) > (MC = MR).
B. P > (ATC = MC = MR).
C. P > ATC > (MC = MR).
D. P = ATC = MC = MR.
Answer: A
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In the classical model, an increase in aggregate demand will lead to an increase in wage rates while a decrease in aggregate demand will
A) change the price of capital. B) leave wages unchanged since workers will not take a cut in pay. C) increase wages since business will be desperate for labor. D) decrease wages.
In Figure 3-7 above, a $250 increase in AP causes
A) Y to increase by $1250. B) induced saving to increase by $250. C) consumption to increase by $1000. D) all of the above.
Suppose the market demand function for ice cream is Qd = 10 - 2P and the market supply function for ice cream is Qs = 4P - 2, both measured in millions of gallons of ice cream per year. Suppose the government imposes a $0.50 tax on each gallon of ice cream. The aggregate surplus with the tax is:
A. $7.11 million. B. $3.56 million. C. $13.50 million. D. $10.67 million.
Research indicates that Medicaid has a significant impact on enrollee behavior. Which of the following statements is not true?
a. Medicaid enrollees use more emergency department services than the uninsured. b. Many individuals, especially women with small children, will refuse to accept jobs in order to maintain Medicaid eligibility. c. Because they are not required to pay premiums, Medicaid enrollees have higher savings rates. d. A significant number of low-income jobholders drop private insurance coverage when they qualify for Medicaid. e. Medicaid coverage is associated with worse health outcomes than either private insurance or even no insurance at all.