In the long run, if some monopolistically competitive firms are earning economic losses then
A. firms will leave the industry.
B. raise prices until they earn economic profits.
C. new firms will enter the industry.
D. they will increase production until marginal costs fall.
Answer: A
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In England the Thatcher government substituted a "poll tax" for the local property tax. People took strong exception to the tax, which is basically a head or "lump sum" tax. The principle of taxation such a tax violates is called
a. the benefits principle. b. the excess burden principle. c. the ability-to-pay principle. d. the constitutional principle.
The fixed rate in a swap contract is
A) a certain short rate in the market when the contract is signed. B) a certain long rate in the market when the contract is signed. C) negotiated by the parties in the contract. D) the difference between stated long and short rates when the contract is signed.
A closed shop exists when the
a. employer is only permitted to hire union members b. union is the owner of the firm c. union members are not allowed to be hired d. employer can hire nonunion workers, but the workers must join the union within a certain time period e. firm goes bankrupt and workers lose their jobs
According to real business cycle theory, business cycles
a. can be eliminated with appropriate monetary and fiscal policy. b. are natural and efficient reactions to changes in productivity. c. do not occur. d. occur infrequently. e. none of the above.