Which of the following is a positive statement?
a. Driving speeds should be lowered so that fewer accidents will occur.
b. When per capita income falls, fewer meals are consumed at restaurants.
c. The minimum wage is too low; college students deserve a raise.
d. Cigarette sales should be made illegal in order to reduce the incidence of cancer.
e. Social Security is a good program for U.S. workers.
B
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In the short-run, a monopolistically competitive firm:
a. can earn only a normal profit. b. will produce at the point where marginal revenue is greater than marginal cost, in order to maximize profits. c. will produce at the point at which price equals minimum ATC, to maximize profits. d. will charge a price equal to its marginal revenue. e. will shut down temporarily if price is less than AVC.
Which of the following would not be included as part of personal income?
a. Welfare benefits b. Food stamps distributed by the government c. Social security benefits d. Indirect business taxes e. Corporate dividend payments to stockholders
All of the following are true regarding flexible exchange rates except
A. Exchange rate movements alter relative prices and may disrupt import and export flows. B. The quantity of foreign exchange demanded equals the quantity supplied. C. Some people are hurt while others are helped by exchange rate movements. D. Speculators typically push exchange rates away from the long-term equilibrium.
If a country produces a commodity in the range of decreasing returns to scale, and the country begins to export more in a pure free trade system, the domestic price of the commodity will
A. fall. B. rise. C. exceed the price in foreign countries. D. be below the price in foreign countries. E. One cannot predict the impact on the price of the commodity.