If a firm minimizes its losses by shutting down in the short run, then at all other output levels,
a. variable cost would exceed total revenue
b. total revenue exceeds total cost
c. marginal revenue exceeds marginal cost
d. total cost is zero
e. total revenue is zero
A
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A local newspaper headline states "Congress Votes Against President's Proposed Tax Increase." An economist would interpret the statement as
A) a sad event, because all economists favor tax cuts. B) uninteresting, because all economists favor theories instead of reality. C) a purely political issue not related to economics. D) a shorthand way of saying, "More individuals in Congress voted against the tax cut compared to the number of individuals who voted in favor of the tax cut."
Fluctuating interest rates tend to stabilize real output when the
A) IS curve is flat. B) IS curve is steep. C) LM curve is flat. D) LM curve is steep.
What is the advantage of the government imposing an ad valorem tax over a specific tax when facing a monopoly?
What will be an ideal response?
Suppose the price of an airline ticket from Dallas to Boston costs $600 . A bus ticket costs $150 . Traveling by plane takes 6 hours compared with 51 hours by bus. Other things constant, an individual would gain by choosing air travel if, and only if, his time were valued at more than
a. $6 per hour. b. $8 per hour. c. $10 per hour. d. $15 per hour.