If there is a permanent increase in demand for the product of a perfectly competitive industry, the process of transition to a new long-run equilibrium will include:
a. the entry of new firms.
b. temporarily higher profits.
c. both a and b.
d. neither a nor b.
c
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Refer to Figure 5-11. S1 represents the supply curve that reflects the private cost of production and S2 represents the supply curve that reflects the social cost of production
One way to internalize the external cost generated by utilities is to impose a Pigovian tax on the production of electricity. What is the size of the Pigovian tax that will internalize the cost of the externality? A) P2-P0 B) P1-P0 C) P2-P1 D) P0
Which of the following statements is true?
A) Because the federal income tax system is progressive, measuring poverty using after-tax incomes results in a higher poverty rate than if poverty is measured using before-tax incomes. B) In the United States, income remaining after federal taxes are paid is more equally distributed than income before taxes. C) If non-cash benefits such as food stamps and rent subsidies were added to the incomes of low-income families, poverty would be eliminated. D) If transfer payments such as Social Security payments to the retired and disabled were excluded from official statistics used to estimate the percentage of people with incomes below the poverty line, the amount of poverty in the United States would be much greater.
At the end of the populist cycle, workers are better off than they were before the populist cycle began in terms of real wages and job creation
Indicate whether the statement is true or false
Which of the following best explains why many US economists support free international trade?
(a) Workers who lose their jobs can collect unemployment compensation (b) It is more important to reduce world inflation than to reduce US unemployment (c) Workers are not affected; only businesses suffer (d) The long-run gains to consumers and some producers exceed the losses to other producers (e) Government can protect US industries while encouraging free trade