A 50 percent tax on the profits of a monopolist will
A. be totally shifted to the consumer.
B. raise price and lower quantity.
C. cause no change in profit-maximizing price and quantity.
D. change price but not quantity.
Answer: C
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BAE, a British defense company, has the contract to produce Tornado aircraft for the Royal Air Force. BAE is producing the aircraft at the lowest possible cost. If the RAF orders one more Tornado, there will be
A) a decrease in opportunity costs as average costs decrease. B) a misallocation of resources. C) an increase in opportunity cost for Tornados. D) an outward shift in the PPF.
The U.S. record is superior to that of Europe in ________
A) growth in real productivity. B) real wage growth C) growth in employment D) All of the above
By comparing the market value of livestock, corn, wheat and oats in 1880 to 1900, one can see that agricultural growth in the South did not occur
Indicate whether the statement is true or false
Because warranties are potentially ________, low-quality goods are ________ to have warranties
A) very expensive; less likely B) inexpensive; less likely C) very expensive; more likely D) inexpensive; more likely