When a monopolistically competitive industry is in long-run equilibrium
A. firms earn economic profit.
B. firms earn zero economic profit.
C. price equals minimum possible average cost.
D. price equals marginal cost.
B. firms earn zero economic profit.
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In Singapore the government places a $5,000 tax on the buyers of new automobiles. After the purchase of a new car, a buyer must pay the government $5,000. How would the imposition of the tax on buyers be illustrated in a graph?
A) The tax will shift the demand curve to the left by $5,000. B) The tax will shift the supply curve to the left by $5,000. C) The tax will shift both the demand and supply curves to the right by $5,000. D) The tax will shift the demand curve to the right by $5,000.
Featherbedding allows unions to increase wages by:
A. limiting the supply of labor. B. increasing firms' demand for labor. C. forcing firms to accept higher-than-equilibrium wages. D. reducing labor share of payroll taxes.
Answer the following questions true (T) or false (F)
1. A college must decide if it wants to offer more Internet-based classes. This decision involves answering the economic question of "what to produce." 2. One desirable outcome of a market economy is that it leads to a more equitable distribution of income. 3. The government makes all economic decisions in a market economy.
Refer to the information provided in Figure 1.4 below to answer the question(s) that follow.
Figure 1.4Refer to Figure 1.4. Panel D shows a curve which has a slope that is
A. first negative and then positive. B. infinite throughout. C. zero throughout. D. first positive and then negative.