In the short run, which are most important in determining changes in output?
a. marginal costs and revenue
b. total costs and revenue
c. average costs and revenue
d. fixed costs
a
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Capital gains are taxed at a different rate than income and this reduces revenues the government receives. All else equal, what would happen if capital gains taxes were eliminated?
A) They would have to be replaced by a consumption tax. B) The government would not be able to spend money on any programs. C) Everyone would have to pay less in taxes. D) The deficit would increase because of lack of revenues.
If the Fed sells bonds in an open market operation, which of the following is most likely to occur?
a. The equilibrium level of GDP decreases b. The money supply increases c. The interest rate falls d. The aggregate expenditure line shifts upward e. The open market operation is said to be expansionary.
Juanita, a lawyer, can type faster than Jill, her secretary. Jill, on the other hand, does not have the ability or skills to practice law. Applying the principles of international trade to this situation, an economic consultant advises Juanita to
a. fire Jill, practice law and do the typing because she's better at both b. practice law and leave all the typing to Jill c. divide her time equally between typing and practicing law d. quit law and concentrate on typing because that's her comparative advantage e. quit law and concentrate on typing because that's her absolute advantage
Carson Manufacturing uses sharp but temporary price cuts to discourage new competition in the widget market. Which barrier to entry is used by Carson Manufacturing?
a. Predatory pricing b. Price skimming c. Economies of scale d. Deregulation