Figure 9.2 shows the cost structure of a firm in a perfectly competitive market. If the market price is $10 and the firm chooses the profit maximizing output level, its profit is:
A. $1,000.
B. $800.
C. $720.
D. $200.
Answer: D
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Discuss the advantages of using an income tax system such as the one discussed in this chapter, as opposed to a consumption tax.
What will be an ideal response?
Which of the following U.S. antitrust laws prohibits mergers through the acquisition of a firm's assets if the merger would lessen competition?
a. Clayton Act. b. Robinson-Patman Act. c. Celler-Kefauver Act. d. Sherman Antitrust Act.
If people correctly anticipate the effects of expansionary policy, an increase in the growth rate of aggregate demand will tend to increase real GDP: a. in both the short run and the long run. b. in the short run but not the long run
c. in the long run but not the short run. d. in neither the short run nor the long run.
If macaroni and cheese is an inferior good, then
a. the income effect and the substitution effect work in opposite directions b. as the budget line shifts to the right, consumers demand more macaroni and cheese c. when the price of macaroni and cheese rises, the quantity demanded also rises d. the quantity demanded rises as purchasing power rises e. individuals will not consume macaroni and cheese