A firm will attain more monopoly power as demand for its product becomes more elastic.
a. true
b. false
Answer: b. false
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When shortages or surpluses persist for any extended period of time, they
A) are a consequence of failure to allow prices to perform their rationing function. B) are evidence of an underlying imbalance between demand and supply. C) are evidence of goods being scarce. D) indicate that there is no price that will clear the market in the case of some goods.
An increase in the interest rate causes
A) a movement down along the money demand curve. B) the money demand curve to shift to the left. C) a movement up along the money demand curve. D) the money demand curve to shift to the right.
In an Israeli factory, each worker can produce 2/5 of a shirt in an hour or 1/3 of a pair of pants in an hour. If there are 500 workers in the factory, then the maximum number of shirts that can be made in an hour is
a. 100 b. 200 c. 50 d. 250 e. 300
The marginal income tax rate is equal to
A. the change in the tax payment divided by the change in income. B. the percent of total income that goes to taxes. C. the average tax payment divided by the total tax payment. D. the total tax payment divided by total income.