The Social Security retirement program is financed by a 10.6 percent payroll tax that applies to earnings up to an income cutoff that is adjusted upward annually by the growth rate of nominal wages. As of 2013, the income cutoff was
a. $15,000.
b. $32,700.
c. $113,700.
d. $250,000.
C
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Suppose the market demand for milk is Qd = 150 - 5P. Additionally, suppose that a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run there is free entry into the market. Suppose the demand for milk doubles. How many new firms enter the market in the long run due to the increased demand?
A. 10 B. 20 C. 100 D. 2
According to the Added Perspective in the text, a new cost-effective vaccine for chickens can be expected to have what effect on the Malaysian production possibilities curve and why?
a. increase, because it is a technological innovation b. decrease, because it will cause a loss of jobs for farmers c. increase, because capital will decrease as less is needed d. decrease, because fewer chickens will survive with the vaccine e. decrease, because the vaccine is very costly
Figure 8.8 shows demand, marginal revenue, and costs of a duopolist. Suppose that the two duopolists have the same costs. If the two firms form a cartel and charge the profit-maximizing monopoly price, then compared to perfect competition, each firm's profit will be ________ and the total output level will be ________.
A. greater; greater B. greater; smaller C. smaller; greater D. smaller; smaller
What are menu costs?
A) the full list of a firm's costs of production B) the costs to a firm of changing prices C) the cost to a household of borrowing money when there is deflation D) the opportunity cost of dining in a restaurant instead of at home