Which of the following statements regarding a profit-maximizing monopolistically competitive firm is NOT true?
A) The MR curve lies below the demand curve.
B) The firm produces the quantity at which the MR curve intersects the MC curve.
C) The MC curve intersects the ATC curve at the ATC curve's lowest point.
D) The firm's price equals the price at which the MR curve intersects the MC curve.
D
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Extractive economic institutions are:
A) likely to prevent entrepreneurs with new ideas from entering into the right line of business. B) likely to encourage entrepreneurs with new ideas from entering into the right line of business. C) found only in market economies. D) found only in command economies.
By donating $1,000 to the Salvation Army, Caroline reduces her taxable income. To Caroline, the reduction in her taxable income is
A) an incentive. B) an opportunity cost. C) the margin. D) a marginal benefit. E) a marginal cost.
When individuals make decisions about how much schooling to obtain, they
A) do not take account of the personal benefits that it creates. B) do not take account of the external benefits that it creates. C) overvalue the personal benefits that it creates. D) overvalue the external benefits that it creates.