A lump-sum tax (a tax that is treated as a fixed cost) is placed on a monopolist. How will that affect its output and pricing decisions?
Answer: Output and price would remain unchanged
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Research by Reinhart and Rogoff indicate that most of the increase in national debt as a result of a financial crisis is due to
A) government bail outs of financial institutions. B) increase spending on social welfare programs. C) government stimulus programs. D) sharp declines in tax revenues.
Keith just got an iPhone 5 for his birthday, and he quickly switches his data over and throws his iPhone 4 in a drawer and forgets about it. Economists would say this behavior is ___________ and would use the concept of ________________ to explain this choice.
A. rational; the implicit cost of ownership B. irrational; the implicit cost of ownership C. irrational; ignoring sunk costs D. rational; considering sunk costs
The slope of the consumption function:
A. is horizontal. B. equals 1. C. equals the marginal propensity to consume. D. is vertical.
A perfectly competitive firm is maximizing profits in the short run. This implies that the firm is earning the most economic profits possible, which
A) must be positive. B) must be either zero or positive. C) can be positive, negative, or zero. D) exist at the point at which price equals total cost.