Inflation affects:
A. both the level and the distribution of income.
B. neither the level nor the distribution of income.
C. the distribution, but not the level, of income.
D. the level, but not the distribution, of income.
A. both the level and the distribution of income.
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
If at its current production level, a perfectly competitive firm's marginal revenue and long-run marginal cost are equal to $1.50 and its long-run average cost is $1.65, which of the following statements is true?
A) The firm should expect the market price of its product to increase. B) The firm should expect to earn positive economic profit indefinitely. C) The firm should expect the market price of its product to fall. D) The firm should expect the market supply curve to increase.
What is the best response of Vendor B to Vendor A pricing high?
a. Also price high b. Price low c. Leave the market d. All of the above
Which of the following statements explains increasing returns to scale? a. A larger firm can produce at a higher average total cost than a smaller firm. b. A larger firm can produce at a lower average total cost than a smaller firm
c. A larger corporation has lower opportunity costs than a smaller corporation. d. The cost of production for each unit of good in a small firm always increases as output increases.