When price and marginal cost are equal for a perfectly competitive firm, the firm is
A) minimizing average total cost.
B) maximizing total revenue.
C) maximizing economic profit.
D) earning negative economic profit.
C
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If taxes go up and all else remains equal, then consumption should:
a. rise by more than the tax increase. b. rise by the same amount as the tax increase. c. rise by less than the tax increase. d. fall.
people know that the inflation rate will increase from 3 percent to 5 percent. As a result
What will be an ideal response?
Explain the problem of adverse selection. Discuss ways health insurance companies have tried to overcome this problem
Please provide the best answer for the statement.
Refer to the competitive market diagram for product Z. Assume that the current market demand and supply curves for Z are D 2 and S 2 . If there are substantial external costs associated with the production of Z, then:
A. a price lower than B and an output greater than G would improve resource allocation.
B. government should levy a per-unit excise tax on Z to shift the demand curve to the right.
C. government should levy a per-unit excise tax on Z to shift the supply curve toward S 1 .
D. government should subsidize the production of Z to lower equilibrium price and increase
equilibrium output.