A monopoly sets a market price that is higher than the marginal cost of production. This fact implies that a monopoly's allocation of resources is:
A. unfair.
B. inefficient.
C. discriminatory.
D. excessive.
Answer: B
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Which of the following is an example of a federal mandate?
A) the Medicaid program B) an excise tax C) the personal tax exemption D) the Food and Drug Administration (FDA)
Suppose that income tax revenues are maximized at an average (income) tax rate of 45 percent. If the Laffer curve is a correct diagrammatic representation of the relationship between tax rates and tax revenue, it follows that a tax rate of
A) 35 percent will reduce tax revenues. B) 48 percent will reduce tax revenues. C) 48 percent will generate as much tax revenue as a tax rate of 45 percent. D) 35 percent will generate as much tax revenue as a tax rate of 45 percent. E) a and b
Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive.
If the market supply curve is given by S3, then we would expect firms to:
A. shut down in the short run. B. exit the market in the long run. C. enter the market in the long run. D. neither exit nor enter the market in the long run.
A World View titled "Export Ratios" examines the openness of trade for several countries based on the trade to GDP ratio. Of the countries listed below, which exports the least (as measured as a percentage of GDP)?
A. United Arab Emirates. B. United States. C. Canada. D. Belgium.