If a monopoly firm is at a level of output where MC equals $10 and is increasing, MR equals $10, and average variable cost equals $9 . To maximize profits, the firm should:
a. increase both output and price
b. increase output but decrease the price.
c. decrease output and increase the price.
d. not change either the output or the price.
d
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Sue earns income of $80,000 per year. Her average tax rate is 50 percent. Sue paid $5,000 in taxes on the first $30,000 she earned. What was the marginal tax rate on the first $30,000 she earned, and what was the marginal tax rate on the remaining $50,000?
a. 6.25 percent and 50.00 percent, respectively b. 10.00 percent and 70.00 percent, respectively c. 16.67 percent and 60.00 percent, respectively d. 16.67 percent and 70.00 percent, respectively
Monetary neutrality means that a change in the money supply
a. does not change real variables. Most economists think this is a good description of the economy in the short run and in the long run. b. does not change real variables. Most economists think this is a good description of the economy in the long run but not the short run. c. does not change nominal variables. Most economists think this is a good description of the economy in the short-run and the long run. d. does not change nominal variables. Most economists think this is a good description of the economy in the long run but not the short run.
One solution to long-run structural problems could involve:
A. moving along the domestic supply curve. B. shifting the domestic supply curve up. C. shifting the world supply curve up. D. shifting the world supply curve down.
Which statement is false, given what you know about the local substitution argument?
A. People in the town will buy their clothes with team logos on them, so the economic impact of that buying must be counted as additional money to the city from having the sports team there. Also, people in the town will go to the games and buy tickets, food, and souvenirs, causing the economy of the town to get better. B. People in the town will go to the games and buy tickets, food, and souvenirs, causing the economy of the town to get better. C. People in the town will buy their clothes with team logos on them, so the economic impact of that buying must be counted as additional money to the city from having the sports team there. D. People from out of town will go to the games and buy tickets, food, and souvenirs, causing the economy of the town to get better.