Suppose at the current level of labor used, MRP = $20 and MFC = $25. To maximize profits, the firm should
A. maintain the current level of labor.
B. reduce the level of labor.
C. expand production.
D. hire more labor.
Answer: B
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"Those most able should pay the highest taxes" reflects the
a. ability-to-pay principle. b. concept of horizontal equity. c. idea of fiscal federalism. d. benefits principle.
When income increases the slope of an individual's demand curve, the demand curve
a. turns positive. b. becomes undefined. c. remains negative. d. becomes infinite.
At macro equilibrium:
A. Exports equal imports. B. Money supply equals money demand. C. Population growth is stable. D. Aggregate demand equals aggregate supply.
Holding other factors constant, a decrease in the tax rate on revenue generated by capital will:
A. decrease investment. B. increase national saving. C. decrease national saving. D. increase investment.