Figure 8.2 shows demand and costs for a monopolistically competitive firm. At the profit-maximizing output level:
A. the firm is earning a positive economic profit and more firms are expected to enter the market.
B. the firm is earning a zero economic profit and no firms are expected to enter the market.
C. the firm is earning a negative economic profit and more firms are expected to leave the market.
D. There is not sufficient information.
Answer: A
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A) usually have no permanent effects on an economy. B) is the best way to increase exports. C) protect United States jobs. D) eventually reduce exports.
Based on the table below, the four-firm concentration ratio equals what percentage of annual sales?
A. 60 percent B. 100 percent C. 40 percent D. 33 percent
The CPI market basket
A) weights the goods and services according to the budget of an average urban household. B) determines the best possible way of taxing the average urban household. C) determines how the spending patterns of the average urban household change from month to month. D) determines how spending patterns change from urban household to urban household. E) changes from one month to the next in order to calculate the CPI.
The Coase theorem suggests that taxes should be enacted to alleviate the effects of negative externalities
a. True b. False Indicate whether the statement is true or false