For economists, conducting experiments is often difficult and sometimes impossible
a. True
b. False
Indicate whether the statement is true or false
True
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The overall federal tax structure is
a. regressive because the average tax rate of those with low incomes is higher than the rate imposed on those with higher incomes. b. progressive because the average tax rate of those with high incomes is greater than the rate imposed on those with lower incomes. c. flat because the average tax rate is approximately constant across all income brackets. d. progressive for income levels up to approximately $100,000 but regressive for income levels above this figure.
A shortage occurs when the:
a. price is at the equilibrium. b. price is above the equilibrium. c. price is below the equilibrium price. d. quantity supplied exceeds the quantity demanded.
Economists use a resource’s price as an indicator of its relative scarcity.
Answer the following statement true (T) or false (F)
Assume that firms in a perfectly competitive market are earning economic profits. Which of the following statements describes the change in market price and output as a result of the entry of new firms into this market?
A) The market demand curve shifts to the right, causing price to rise and market output to increase. B) The market demand curve shifts to the left, causing price to fall and market output to decrease. C) The short-run market supply curve shifts to the right, causing price to fall and total market output to increase. D) The short-run market supply curve shifts to the left, causing price to rise and total market output to decrease.