A picture-frame company operates in a monopolistically competitive market. Its short- run equilibrium price is $80 and its ATC is $65 . It sells 100 picture frames a week. Ignoring for now its long-run position, in the short run,
a. the firm makes zero economic profit, zero accounting profit, but $1,500 normal profit
b. other picture-frame companies will leave the market because it knows new firms will enter to drive price and economic profit down
c. the firm makes an $80,000 accounting profit
d. the firm makes an economic profit of $1,500
e. the market demand curve will shift to the left as more firms enter the market
D
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What is the Human Development Index?
What will be an ideal response?
Suppose an individual were to win $1,000 in Las Vegas. The permanent-income hypothesis predicts that the individual would NOT be likely to
A) put his winnings in the bank. B) throw a party. C) buy a dishwasher. D) purchase some shares in a corporation.
In any given year, many people at the tails of the income distribution are only there temporarily _____
a. because of changes in the tax code b. making it difficult to track them for determining progressivity c. thereby overstating the progressive nature of the tax system d. making it important to look at the progressivity of the tax system in terms of lifetime income
Appendix: In comparing rules for serving a queue, last-come first-served has all of the following effects except
a. reduces the waiting time b. causes few customers to arrive and depart more than once c. increases the side payments among those yet to be served d. hastens the adoption of a lottery system for deciding who should get the tickets