In a perfectly competitive industry, in the long-run equilibrium
A) the typical firm is producing at the output where its long-run average total cost is not minimized.
B) the typical firm is earning an accounting profit greater than its implicit costs.
C) the typical firm is maximizing its revenue.
D) the typical firm earns zero profit.
D
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Suppose the government breaks up a single-price monopoly and turns it into a perfectly competitive industry
What will happen to price and the quantity produced? What will happen to the monopoly's economic profit and the deadweight loss associated with the monopoly?
How would the elimination of a sales tax affect the market for a product that had been subject to the tax?
A) The equilibrium price for the product would fall by less than the amount of the tax. B) The reduction in government revenue from the tax would be made up by an increase in property taxes. C) The supply of the product would become more elastic. D) The demand for the product would rise and the equilibrium price would fall by the amount of the tax.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and current international transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises, and current international transactions become more negative (or less positive). b. The quantity of real loanable funds per time period falls, and current international transactions become more negative (or less positive). c. There is not enough information to determine what happens to these two macroeconomic variables. d. The quantity of real loanable funds per time period and current international transactions remain the same. e. The quantity of real loanable funds per time period rises, and current international transactions become more positive (or less negative).
You hold bonds issued by the city of Sacramento, California. The interest you earn each year on these bonds
a. is not subject to federal income tax and so these bonds pay a higher interest rate than otherwise comparable bonds issued by the U.S. government. b. is not subject to federal income tax and so these bonds pay a lower interest rate than otherwise comparable bonds issued by the U.S. government. c. is subject to federal income tax and so these bonds pay a higher interest rate than otherwise comparable bonds issued by the U.S. government. d. is subject to federal income tax and so these bonds pay a lower interest rate than otherwise comparable bonds issued by the U.S. government.