If a tax system is made more progressive, the pre-tax wages of upper-income individuals will tend to rise
a. True b. False
a
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One of the effects of patents is to
a. reduce incentives for innovation. b. give firms incentives to worry less about minimizing production costs. c. temporarily provide the patent owner with monopoly power. d. reduce the degree of monopoly power in the short run.
If the Fed sells securities on the open market, this will
A. reduce banks' excess reserves. B. increase banks' excess reserves. C. leave banks' excess reserves unchanged. D. lower the reserve requirement.
Answer the following questions true (T) or false (F)
1. Productive efficiency does not hold for a profit-maximizing, monopolistically competitive firm in the long-run equilibrium because the firm operates along the diseconomies of scale region of its average total cost curve. 2. Monopolistically competitive firms achieve allocative efficiency but not productive efficiency. 3. A monopolistic competitor does not earn profits in the long run unless it can successfully differentiate its product in the minds of its consumers.
The aggregate demand curve is
A. U Shaped B. Horizontal C. Vertical D. Downward sloping