In the long-run, monopolistically competitive firms:
A. have excess capacity.
B. produce at the minimum of average total cost.
C. charge prices equal to marginal cost.
D. both B and C are true.
Answer: A
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When a tariff is imposed, the supply curve for the imported good
A) shifts downward and to the right. B) shifts upward and to the left. C) does not change. D) becomes perfectly inelastic.
Assume Brandon's benefit function for water is S(W) = ?W and he consumes water both in droughts, WD, or in the rainy season, WR. Assume his current consumption bundle is WD = 400 and WR = 100 and the probability of drought is 0.75. What is Brandon's expected utility?
A. 10 B. 17.5 C. 20 D. 30
In the case of positive externalities, too many people consume and produce the good compared to what is desired by society
a. True b. False Indicate whether the statement is true or false
The ability-to-pay principle is most closely tied to the concept of
a. horizontal equity in taxation. b. fiscal federalism. c. vertical equity in taxation. d. the benefits principle of tax equity.