A pure monopoly is not allocatively efficient because at the profit-maximizing level of output ________.
A. P > MR
B. P > AVC
C. P > ATC
D. P > MC
Answer: D
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Producer surplus in a perfectly competitive industry is
A) the difference between profit at the profit-maximizing output and profit at the profit-minimizing output. B) the difference between revenue and total cost. C) the difference between revenue and variable cost. D) the difference between revenue and fixed cost. E) the same thing as revenue.
If the short-run Phillips curve has a very shallow (or flat) slope, a. the self-correcting mechanism cannot work
b. the structural deficit will grow in a recession. c. the structural deficit will fall in a recession. d. the inflation costs of reducing unemployment are fairly low.
Which of the following is the best example of "creative destruction"?
a. The imprudent use of a credit card by a family that already has a high level of debt. b. The virtual elimination of the film camera by the digital camera. c. The failure of a business because of poor management. d. The failure of a business because of higher cost resulting from government regulation.
Nancy paid a tax of $0.50 on the last dollar she earned in 1999 . Nancy's marginal tax rate in 1999 was
a. more than 50 percent. b. exactly 50 percent. c. higher than her average tax rate. d. lower than her average tax rate.