A tax in an industry would result in:
a. a decrease in consumer surplus
b. a decrease in producer surplus
c. a decrease in the gains from trade.
d. all of the above.
d
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When a perfectly competitive firm is in long-run equilibrium, what is the relationship between the firm's marginal cost, average total cost, marginal revenue, and price?
What will be an ideal response?
The incidence of a tax depends on whether the government collects the tax from buyers or sellers
Indicate whether the statement is true or false
The difference between a firm's total revenues and total costs when all explicit and implicit costs are included is the firm's
a. economic profit. b. accounting profit. c. opportunity cost of capital. d. long-run average total cost.
Which of the following would help explain why the aggregate demand curve slopes downward?
a. An unexpectedly low price level raises the real wage, which causes firms to hire fewer workers and produce a smaller quantity of goods and services. b. A lower price level causes domestic interest rates to rise and the real exchange rate to appreciate, which stimulates spending on net exports. c. A higher price level increases real wealth, which stimulates spending on consumption. d. A lower price level reduces the interest rate, which encourages greater spending on investment goods.