A monopolistic competitor is currently producing 2,000 units of output; price is $100, marginal revenue is $80, average total cost is $130, marginal cost is $60, and average variable cost is $60. The firm should
A. raise price because the last unit of output decreased profit by $30.
B. lower price because the next unit of output increases profit by $20.
C. keep the price the same because the firm is producing at minimum average variable cost.
D. raise price because the firm is losing money.
Answer: B
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All of the following are non-price determinants of supply except
A) costs. B) technology. C) income. D) future expectations.
If a firm is producing at its minimum efficient scale, increasing its output slightly will lead to diseconomies of scale
a. True b. False
A progressive tax
a. is one that taxes those with higher incomes at a higher rate than those with lower incomes. b. takes a similar percentage in the form of taxes from those with higher incomes as it does from those with lower incomes. c. takes a higher percentage of income in the form of taxes from those with lower incomes than from those with higher incomes. d. is any tax in which the dollar amount of taxes paid increases with income.
Easy monetary policy and tight fiscal policy lead to
A. roughly unchanged real interest rates. B. roughly unchanged real interest rates only when Ricardian equivalence holds; otherwise, low real interest rates. C. high real interest rates. D. low real interest rates.