Good A has a price elasticity of demand of .27, while good B has a price elasticity of demand of 2.9 . To raise the most tax revenue, the government should:
a. place a unit tax on good A.
b. place a unit tax on good B.
c. raise the price elasticity of demand for good A.
d. subsidize the production of good B.
e. cut its spending for various social programs.
a
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At its shutdown point, a perfectly competitive firm earns total revenue that
A) exceeds its total cost. B) generates a normal profit. C) just equals its total variable cost. D) exceeds its total variable cost.
Two social institutions that are essential for trade to be organized are ________
A) property rights and laws B) markets and banks C) businesses and banks D) markets and property rights
If the Fed pursues expansionary monetary policy then
A) the money supply will increase, interest rates will rise and GDP will rise. B) the money supply will decrease, interest rates will fall and GDP will fall. C) the money supply will decrease, interest rates will rise and GDP will fall. D) the money supply will increase, interest rates will fall and GDP will rise.
Minimum efficient scale is defined as the level of output at which the short-run average total cost stops decreasing
Indicate whether the statement is true or false