In perfectly competitive industries with identical firms, consumers always end up paying the entire burden of a per-unit tax on output in the long run.
Answer the following statement true (T) or false (F)
True
Rationale: The long run supply curve is perfectly elastic in this case -- which means taxes are passed to consumers.
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A main reason why the U.S. trade deficit grew so large from 1997 to 2000 was that
A. Congress removed all tariffs and trade restrictions on imports. B. NAFTA was introduced and Mexican exports flooded the United States. C. the international value of the dollar fell during the 1990s, which encouraged U.S. exports. D. the international value of the dollar rose in the last half of the 1990s, which encouraged U.S. imports and damaged U.S. exports.
A firm uses workers, land, and machinery for its production process. Which of the following statements is then true?
A) The only way the firm can change its output level in the long run is by changing the number of workers. B) The only way the firm can change its output level in the long run is by changing the amount of land it owns. C) The only way the firm can change its output level in the long run is by changing the amount of machinery. D) The firm can change its output level in the long run by changing any or all of its three inputs.
Financial panics characterized by depositor "runs" and consequent bank failures have not occurred in the United States since the 1930s primarily because
A) commercial banks now hold larger reserves. B) the Federal Deposit Insurance Corporation has reduced the fears of depositors. C) we have abandoned the gold standard. D) we have had no major recessions since the 1930s.
When economists speak of normal goods they mean goods for which
A) the demand curve slopes downward. B) marginal utility is positive. C) marginal utility decreases as consumption increases. D) demand decreases when incomes fall.