Refer to the above graph. It represents a monopolistically competitive firm in a constant-cost industry. The firm:
A. is earning an economic profit at Q0.
B. will produce more than Q0.
C. will produce less than Q0.
D. is suffering an economic loss at Q0.
Answer: A
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Refer to the below graphs. (Assume that the pre-migration labor force in Country A is 100 and that it is 150 in country B.) Domestic output in country B will, after immigration:
A. Increase by $50M
B. Increase by $250M
C. Decrease by $50M
D. Decrease by $250M
With tied aid
(a) MNC investment depends on tax concessions. (b) aid recipients must use the aid to purchase goods and services from the donor. (c) aid recipients must follow World Bank/IMF conditionality. (d) all of the above.
Sam has $200 a month to spend on either tanning sessions or rounds of golf. Tanning sessions are $20 each, and a round of golf is $40. Sam currently consumes six tanning sessions and two rounds of golf. Both tanning and golf are normal goods. If the price of a round of golf drops to $20, the income and substitution effects will cause Sam's consumption of tanning sessions:
A. to increase, since both effects predict an increase. B. to decrease, since both effects predict a decrease. C. to change, but the direction is dependent upon which effect is stronger. D. It is impossible to say what will happen without more information.
"To each according to what he or she produces" describes the ________ theory of income determination.
A. equity B. productivity C. needs D. egalitarian