If inventory levels are decreasing, then we should expect business firms to
A. decrease prices.
B. decrease output.
C. lay off workers.
D. increase output.
Answer: D
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A monopolist faces the inverse demand for its output:
p = 30 – Q The monopolist also has a constant marginal and average cost of $4/unit. The government is seeking ways to collect tax revenue from the monopolist and faces two proposals: i. Impose a specific tax of t on the monopolist. ii. Impose an ad valorem tax of a on the monopolist. a. Suppose the government imposes a 20% ad valorem tax on the monopolist. What price and quantity does the monopolist choose and how much revenue does the government generate from the tax? b. Rather than an ad valorem tax, what is the government's revenue from a specific tax of t imposed on the monopolist? Your answer should be in terms of t. c. Show that a specific tax of $3.70/unit generates the same revenue as a 20% ad valorem tax (approximately). d. Which tax has a greater distortion on the monopoly output?
Are funds available on a credit card included in a definition of the money supply?
a. Yes, because these funds can be used to pay for goods and services. b. Yes, because these funds are included in M2. c. No, because these funds are hard to measure total credit card spending. d. No, because these funds are not a store of value.
If aggregate supply shifts from AS1 to AS2, then the price level will:
Refer to the graph above.
A. Increase and real domestic output will increase
B. Decrease and real domestic output will increase
C. Increase and real domestic output will decrease
D. Decrease and real domestic output will decrease
If a country gets grants that improve its roads and bridges which allows for greater exports, it will impact its economy by
A. decreasing aggregate supply. B. decreasing aggregate demand. C. increasing aggregate demand. D. increasing aggregate supply.