In a perfectly competitive, decreasing-cost industry, the long-run market supply curve slopes downward
a. True
b. False
A
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Suppose the elasticity of supply of land is 0 and elasticity of demand is 2. If the government imposes a 10 percent tax on land, then
A) buyers and sellers each pay 5 percent of the tax. B) buyers pay all of the tax. C) sellers pay all of the tax. D) sellers pay a smaller share of the tax than do buyers but both buyers and sellers pay some of the tax. E) buyers pay 1/2 of the tax.
In the short run, fiscal and monetary policy cause unemployment and inflation to move in opposite directions because
a. the Fed and Congress rarely agree on policy. b. one controls aggregate demand, the other controls aggregate supply. c. both policies control only aggregate supply. d. both policies control only aggregate demand.
As domestic income decreases, the trade balance:
A. is likely to improve. B. is not likely to change. C. is likely to worsen. D. may improve or worsen depending on the size of the decrease in income.
________ of the payroll tax if labor supply is perfectly elastic.
A. Employers and employees will evenly share the burden B. Employees will bear the full burden C. Employers will bear the full burden D. If labor supply is perfectly elastic, there is no tax burden.