A monopolistically competitive firm is currently earning a positive economic profit. If other firms enter the market, we would expect that the added competition will cause this firm to adjust its output such that it
a. will operate closer to its efficient scale.
b. will operate further from its efficient scale.
c. will no longer be at its efficient scale.
d. might move either closer to or further from its efficient scale.
b
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If the government ________ taxes to pay for spending on infrastructure, the result will most likely be a(n) ________ in capital deepening
A) decreases; increase B) increases; increase C) increases; decrease D) eliminates; elimination
The demand for potatoes at current prices is likely to be
A. elastic. B. inelastic. C. unit elastic. D. perfectly elastic.
A tax levied on the purchase of a specific good or service is
A) an excise tax. B) a consumption tax. C) a purchase tax. D) a value tax.
Suppose that the nominal rate of interest is holding steady at 2 percent even as the anticipated rate of inflation rises. What is happening to the real rate of interest?
A. It equals the nominal interest rate. B. It is increasing. C. It is unchanged. D. It is decreasing.