When the government imposes a tax on a firm that generates external costs, the tax is
A. always borne entirely by the firm.
B. always borne entirely by the consumer.
C. borne only by the government.
D. usually borne by both the firm and the consumer.
Answer: D
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Refer to Figure 15-2. In the figure above, the movement from point A to point B in the money market would be caused by
A) an open market sale of Treasury securities by the Federal Reserve. B) a decrease in real GDP. C) an increase in the price level. D) a decrease in the required reserve ratio by the Federal Reserve.
Which of the following is not true with regard to economic profit?
a. economic profit equals total revenue minus total cost b. economic profit excludes implicit cost c. economic profit is any profit greater than a normal profit d. firms attempt to maximize economic profit e. long-run economic profit is always zero in perfect competition
Liquidity refers to the ability of an asset to hold its value in periods of inflation
a. True b. False Indicate whether the statement is true or false
Does a competitive firm have the ability to influence the quantity of output it supplies? Does it have the ability to influence its average revenue?