In perfect competition, an increase in the firm’s fixed costs lead to
A. a drop in the firm’s output.
B. an increase in the firm’s output.
C. an increase in its total costs.
D. a drop in industry output.
Answer: C
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Currently, the U.S. national income and product accounts (NIPA) use what type of price index to calculate real GDP?
A) Fixed-weight B) Variable-weight C) Chain-weight D) Heavy-weight
Given that resources can be allocated by the government, the market, a random process, or on a first-come first-serve basis, which of the following statements is true?
a. The market system is not entirely fair but it creates incentives to increase supplies and improve standards of living. b. The random process of allocation allows individuals to acquire purchasing power and enhances the value of the resources that they own. c. Since the government system does not distinguish between those who have income and those that do not, government allocation of resources is the most efficient. d. There will be no shortages under the first-come first-serve basis of allocation. e. A random process of allocation is fair in the sense that everyone gains and there are no losers.
An oligopoly with a dominant price leader will produce an output level that is ________ than the output level that would prevail if the industry were a monopoly and sells it at a price that is ________ than the price that would prevail if the industry were a monopoly.
A. higher; higher B. lower; higher C. higher; lower D. lower; lower
The type of tax receipts that has shown the slowest growth since World War II has been
A. personal taxes. B. contributions for social insurance. C. taxes on production and imports. D. corporate taxes.