If ABC Printing is producing an output level of 100, where MR is $5 and MC is $3, then the firm is:
a. maximizing total profit.
b. making too much profit.
c. making $200 total profit.
d. making $200 total loss.
e. making an unknown amount of profit or loss.
e
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The structural surplus
A) is legally required to be positive. B) fluctuates over the business cycle. C) is, by definition, equal to the negative of the cyclical deficit. D) equals the actual surplus plus the cyclical surplus. E) is the government budget surplus that would exist if the economy was at full employment.
Some enterprising individuals produce and sell alcoholic beverages without collecting or paying legally required taxes. These “moonshiners” often have to hide their production facilities and hire fast driving delivery personnel to avoid various authorities. These moonshiners
A. are taking advantage of obvious loopholes in the tax rules. B. are making the alcohol taxes more regressive by altering who pays the taxes. C. are indicative of the tax’s excess burden even if their actions may reduce excess burden relative to no moonshining. D. are able to avoid the tax burdens on the moonshined alcohol assuming they are not caught and fined by the authorities.
The income elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in income
a. True b. False Indicate whether the statement is true or false
The Braden brothers considered starting a new skydiving company. Once they read the government regulations they would have to comply with, they changed their minds. This is an example of
A. An administrative cost of regulation. B. An efficiency cost of regulation. C. An equity cost of regulation. D. A compliance cost of regulation.