Assume a perfectly competitive firm sells its output for $150 per unit. At its current 2,000 units of output, marginal cost is $180 and increasing, and average variable cost is $160 . Assuming it wants to maximize its profits, it should:
a. increase output
b. decrease output, but not shut down.
c. maintain its current output rate.
d. shut down.
a
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"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?
a. Benefits-received. b. Inexpensive-to-collect. c. Ability-to-pay. d. Fairness of contribution.
For economists, substitutes for laboratory experiments often come in the form of
a. natural experiments offered by history. b. untested theories. c. "rules of thumb" and other such conveniences. d. reliance upon the wisdom of elders in the economics profession.
Is a congested nontoll road excludable? Is it rival in consumption? How do we classify a congested nontoll road in terms of the four types of goods?
Use the figure to calculate the income elasticity of demand when income increases from $25,000 to $30,000:
A. -0.1818 B. -1.0 C. 0.1818 D. 1.2 E. -1.5