Personal income taxes:
A. make recessions and inflationary episodes more severe.
B. make recessions and inflationary episodes less severe.
C. make recessions more severe and inflationary episodes less severe.
D. make recessions less severe and inflationary episodes more severe.
Answer: B
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Antitrust law is law that
A) does not allow individuals to open trust savings accounts. B) prohibits competition in certain industries. C) prohibits certain kinds of market behavior by firms. D) allows firms under special circumstances to be a monopoly.
If the sellers in a market are aware of their strategic interdependence, then
a. each firm bases its pricing and output decisions on the monopoly model b. each firm, when making pricing or output decisions, must consider the reactions of its competitors c. the firms have little incentive to collude in their pricing and output decisions d. the firms undertake little advertising because they cannot recoup the cost through higher prices e. no firm is able to earn above-normal profit in the long run
Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hangar that he could have rented out for $5,000 per year. He rents a computer for $1,200, buys office supplies for $500, rents an
airplane for $6,000 . pays $1,300 for fuel and maintenance, and hires one worker for $30,000 . Sam's total revenue from pilot training classes this year equaled $90,400 . How did Sam's business do this year? a. Sam realized an economic profit of $3,400 this year. b. Sam realized an economic loss of $3,400 this year. c. Sam realized an economic profit of $5,800 this year. d. Sam realized an economic profit of $3,800 this year. e. Sam realized an economic loss of $3,800 this year.
Distinguish between scarcity and shortage