ECON202 Exam 2, (Chp 6-14, 18)
If the government levies a tax on consumers, what will be the tax incidence? Consumers will bear ____ percent of the tax burden.
100
Suppose a wealthy widow is willing to give $250.00 to charity if the cost in terms of foregone consumption is no more than $175.00. Assume charitable contributions are tax deductible. The widow would be willing to give $250.00 to charity if her income tax rate is at least ____ percent.
(250-175)/(250) = .3 30%
Wage = price x marginal product of labor
.
Producer Surplus equation
1/2 x base x height
If the market price decreases from $1.40 to $0.80 per unit, the firm would produce_____units because at this price
200 MR2=MC
Suppose domestic demand is Qd=16-P and domestic supply is Qs=P. The world price is $2, and the import tariff is $3 per unit. Using the information given above, the consumer surplus will be $___, the producer surplus will be $___, the government revenue will be $___, and the deadweight loss from the tariff will be $___.
60.50 , 12.50 , 18 , 9
Consider the given graph: Economies of scale occur at point: ___ Diseconomies of scale occur at point: ___ In the long-run, the firm will exit the industry when it is at point:___
A C B
Identify after the rent control: A) consumer surplus B) producer surplus C) social surplus
A) A + C B) F C) A + C + F
Each firm can produce at most one car. Suppose the market for electric cars is competitive. Why is the equilibrium price in this market $40,000? Which firms will produce an electric car if the price is $40,000? Which consumers will buy an electric car when the price is $40,000?
All of the above. B, C, and D 1, 3, and 2
Assume that the market for chocolates is perfectly competitive. Which of the following statements would be true in this case?
Assume that the market for chocolates is perfectly competitive. Which of the following statements would be true in this case?
Which of the following statements illustrates the economics of trust?
Being dishonest in the present increases present payoffs, but decreases future payoffs.
Both competitive firms and monopolies produce at the level where marginal cost equals marginal revenue. Then, other things remaining the same, why is price lower in a competitive market than in a monopoly?
Competitive markets face perfectly elastic demand and marginal revenue, while monopolies face downward-slopingdemand and marginal revenue.
Using the results from Table 3, assess each change from the before value to after value as positive, negative, or unclear. A) consumer surplus B) producer surplus C) social surplus
Direction of Change A) unclear B) negative C) negative
Suppose there are two firms in an industry, each with an equal market share. a) The Herfindahl-Hirschman Index (HHI) for this industry is ____ b) If the number of firms increases to 10, each with an equal market share, then the HHI is ____
HHI = Firms x marketshare% ^2 a) 5000 b) 1000
Which of the following is a key difference between perfect competition and monopoly?
In perfect competition, no one firm can influence price, but with monopoly, a single seller sets the price.
Who has the comparative advantage in the production of pizza and chocolate cake? Joe will specialize in making ______, and Samantha will specialize in making ______
Joe has a comparative advantage in pizza, and Samantha has a comparative advantage in cake. pizza , chocolate cake
Both monopolies and monopolistically competitive firms set marginal revenue equal to marginal cost to maximize profit. Given the same cost curves, would you expect prices to be higher in a monopoly or a monopolistically competitivemarket?
Monopoly, because its demand is more inelastic.
Which of the following statements is an example of indoctrination?
Socialism is a lot more fair than capitalism.
What is the problem with the argument that infant industries need to be protected from foreign competition?
Starting a company in isolation may deprive it of "technological spillovers" that its competitors, all located near oneanother, may enjoy.
Then why are market economies considered more efficient than planned economies?
all of the above
Using the concept of Pareto efficiency, which of the following statements is likely to be true?
The outcome in the market for cars is Pareto efficient because it is a perfectly competitive market.
Which of the following statements is not true?
The short-run supply curve of a firm is the portion of its marginal cost (MC) curve that lies below AVC
Which of the following statements is true of the market for cabs in Beijing? Based on your understanding of how the invisible hand works, which of the following decisions is likely to correct the problem of shortages of cabs in Beijing?
There has been a rightward shift of the demand curve, while the supply curve has remained unchanged. The government should lift the price control imposed on the base fare of cabs.
a) Which of the following are examples of inefficiencies created by government intervention? b) Which of the following is not a result of corruption?
a) Creating a large workforce of professionals who review whether the financial reports of companies are true and fair. Quality deterioration in a market after government implements a price control. b) Selling goods at a price that does not include taxes.
a) The value of marginal product of capital (VMPK) is the ____ b)
a) contribution that each additional unit of physical capital adds to a firm's revenues, all else equal. b) MPK x P
a) Our preferences are affected by indoctrination through the ____. b) An example of indoctrination is ____.
a) opinions of others ideologies of others b) not smoking due to antismoking campaigns.
A difficult problem for central planners is bringing together those economic agents whose interests coincide in order to trade. This is known as the _____ problem.
coordination
Let us consider a duopoly with homogeneous products, where two competing firms pick price (Bertrand duopoly). Suppose that Dogwood's marginal cost (MC)= $45 and Rose Petal's marginal cost (MC)= $25. Assume firms can set prices such as $29.99. d) In the Nash equilibrium ____ and the price will be equal to ____.
d) only Rose Petal produces , $44.99
Economies with lower taxes ____ production and ____ available social surplus. One possible cost of such economies is that the gap between the rich and poor may ____.
encourage , increase , increase
Terms of trade is the ______. Terms of trade are determined ______.
exchange rate of goods for goods on the basis of opportunity costs
They know that each time they raise the temperature in the apartment by 1 degree, their heating bill goes up by $20. To maximize social benefit, they should raise the temperature by ____
find marginal benefit
Once planners have successfully brought economic agents together, a second problem of aligning the interests of the economic agents must be solved.This is known as the ______ problem.
incentive
If the market price increases from $1.40 to $2.70 per unit, the firm would_____production from_____to_____units.
increase 272 350
To construct the supply curve in a market with many firms with different cost structures, the _____
individual supply curves for each firm are added together
According to analysis by Charles Clotfelter, the relationship between tax rates and charitable giving is an ____ correlation. This is because as tax rates ____, the cost of charitable giving increases.
inverse , increase
All else being equal, the steeper the supply curve, the the ______ social surplus in a market.
larger
The more inelastic a supply curve is the _____ responsive the quantity supplied is to changes in the price level
less
The graph on the right illustrates a marginal cost (MC) curve and marginal revenue (MR) curve for a monopolist. (Equilibrium at 50) If the firm produces at a quantity of 60 units, then marginal revenue would be____ marginal cost, and this firm would____.
less than; reduce output to enhance profits
Unless shutdown or exit is optimal, every firm expands production until_____
marginal revenue, marginal cost, and price are all equal (MR = MC = P)
The more elastic a supply curve is the ______ responsive the quantity supplied is to changes in the price level
more
Absolute advantage is the ability of an individual, firm, or country to produce:
more of a certain good than other competing producers, given the same number of resources.
Suppose Louis Corporation could increase its profits considerably if it decided to shift from the clothing industry to the IT industry. In this case, the economic profits of Louis Corporation in the clothing industry are:
negative
Use backward induction to determine whether Amy should trust Fahad. The Nash equilibrium is for Amy to ____ her secret and for Fahad to ____ other people.
not tell , tell
Using your graph, demand for this perfectly competitive firm is
perfectly elastic (graph line is horizontal)
All else being equal, the flatter the demand curve, the ______ the social surplus in a market.
smaller
There is ____ a trade-off between equality and social surplus.
sometimes
This problem tells us that one of the sources of economies of scale is:
specialization
When bargaining to deal with negative externalities
the cost falls on the party with the most to gain.
In the long run, the supply curve for a perfectly competitive firm is represented by:
the portion of the marginal cost curve above average total cost
Therefore, the short-run supply curve for a perfectly competitive firm is represented by:
the portion of the marginal cost curve above average variable cost
In a competitive labor market, the profit-maximizing number of workers that a firm will hire occurs where the ____
value of marginal product of labor is equal to the market wage.
Graph of a perfectly inelastic supply
vertical
The equilibrium price is the _____
long-run average total cost of the last entrant into the market
Classify the following goods and services as private goods, common pool resources, club goods, or public goods. a) Health insurance is a private good. b) Radio spectrum is a common pool resource. c) A video on YouTube is a public good. d) A mosquito control program in a city is a public good. e) A library's collection of e-books is a club good.
.
Imagine you are a buyer in a double oral auction with a reservation value of $15 and there is a seller asking for $10. If you accept this offer, you will gain $______ If you are the only buyer, and you know that the lowest ask price is $3, should you accept this offer?
5 Both A and C are correct.
a) A company hires 4, 5, 6, or 7 workers who produce a daily output of 500 units, 620 units, 705 units, and 765 units respectively. The marginal product of labor from hiring 4th worker is 135 units. If the price per product is $1.50 and the daily wage per worker is $100, then the optimal number of workers hired by the company to maximize its profits isA company hires 4, 5, 6, or 7 workers who produce a daily output of 500 units, 620 units, 705 units, and 765 units respectively. The marginal product of labor from hiring 4th worker is 135 units. If the price per product is $1.50 and the daily wage per worker is $100, then the optimal number of workers hired by the company to maximize its profits is ____
6
How does the labor-leisure trade-off determine the supply of labor?
An increase in the wage rate is an increase in the opportunity cost of leisure, and can therefore be expected to reduce the amount of leisure one wishes to consume. Choosing less leisure is equivalent to supplying more labor, thus yielding a positive relationship between the wage rate and the amount of labor supplied.
The results are as follows: Letter B raises much more money than Letter A. In most cases, it raises at least twice the money. Letter C raises more money than Letter A. Letter B raises about 50 percent more money than Letter C. Of the concepts we have discussed in the chapter (social pressure, altruism, and herding), which do you think is most responsible for the success of Letter B?
Impure altruism, because its recipients received something in return.
Which of the following is not an externality?
Jordan has lung cancer from smoking cigarettes.
Suppose an identical tax is levied on capital, labor, and land. Would the tax have the same effect in each of these markets? Explain your answer.
No, an identical tax would yield similar effects but not the same effects, since it is rather unlikely that the relative demand and supply elasticities would be the same in each market.
Is a player's best response in a game the same as his dominant strategy?
Not necessarily. If a player has a dominant strategy, then it is his best response; however, every best response is not always a dominant strategy.
Although there are many examples of game theory in the real world, how well do you think specifics like payoff matrices, Nash equilibrium, and dominant strategies translate to reality? Which of the following are potential reasons game theory differs from reality?
Payoffs are determined by the attitudes and feelings of individuals as well as by their monetary returns. One player may be more cunning, wiser, or more experienced than another. This is the correct answer.
Two firms are planning to sell 10 or 20 units of their goods. The firms face the payoff matrix illustrated on the right. What is the Nash equilibrium if both firms make their decisions simultaneously?
The Nash equilibria are for Firm 1 to produce 10 units and Firm 2 to produce 20 units and for Firm 1 to produce 20 units and Firm 2 to produce 10 units.
Consider a three-person version of the ultimatum game: The Responder does not receive any money but instead decides whether to accept on behalf of a third-party bystander. Otherwise the structure is like the ultimatum game in which the Proposer first decides how to split $10.00. Suppose that in this version you observe that the Responder typically only accepts equal splits of $5.00 each and typically rejects all other offers. Given this information, which of the following is true of the behavior of the Responder when faced with an offer of an even split?
The Responder accepts the offer as she values fairness highly.
Are all efficient outcomes also equitable? Explain.
There is really no definitive answer to this question since issues surrounding efficiency and equity are the domain of normative economics, where subjective value judgments are made.
If the graph on the right represents the market supply and demand curves for pizza, what do we know about the demand curve for an individual pizza shop if the pizza market is in perfect competition?
The shop's demand curve is horizontal at exactly $8
Which of the following would maximize social surplus?
Trade at competitive market equilibrium
Why might game theory not always be an accurate predictor of real-world situations?
We do not always know the exact payoffs, since payoffs involve attitudes and feelings as well as monetary gains.
When a product is elastic, a change in price quickly results in a change in the quantity demanded.
When a good is inelastic, there is little change in the quantity of demand even with the change of the good's price.
Which of the following is not likely to be subject to the tragedy of the commons?
Which of the following is not likely to be subject to the tragedy of the commons?
a) You would be willing to pay ____ to hire a 2nd worker. b) You would be willing to pay a rental rate of up to ____to acquire a 2nd machine. c) Suppose the wage is $275. If you have one pottery wheel, the number of workers you would want to hire is ____. d) Pottery wheels are ____.
a) (marginal*pot cost)= $300 b) $200 c) 2 d) labor complementary
a) The total tax payable for an individual who earns $450,000 a year is $____ b) The marginal tax rate is ____ percent c) The average tax rate is ____ percent
a) 135,963.75 b) 39.6 c) 30.21
a) Calculate the opportunity costs of producing fish and coconuts in Nearway and Farway, and then complete the table below. b) _____an absolute advantage in the production of fish. c) _____an absolute advantage in the production of fish. d) _____a comparative advantage in the production of fish. e) _____a comparative advantage in the production of coconuts. f) The terms of trade are _____ coconuts per fish. g) Who benefits from trade? h) Which nation received the better deal in this trade? i) Would Nearway and Farway ever trade 120 coconuts for 40 fish?
a) 2.0 , 0.5 , 1.5 , 0.67 b) Farway has c) Farway has d) Farway has e) Nearway has f) 1.6 g) Both nations benefit from trade. h) Nearway received the better deal. i) No, because while Farway gains from this trade, Nearway does not.
The graph given shows the supply (Qs=2P) and demand (Qd=18-P) for cigarettes. a) If there is no tax on cigarettes, the producer surplus is $____, the consumer surplus is $____, and the social surplus is $____ b) The tax of $6 on cigarettes will increase social surplus if ____
a) 36 , 72 , 108 b) there are negative externalities
a) In the above case, when the daily wage of the workers is $1400, then the firm will produce the products ____ only after reducing the number of workers employed. b) The firm observes with the help of the ____ that as additional labor is employed, the quantity produced for product A increases.
a) A and D b) production function
a) In which of the following cases, do the players randomize their strategies? (Check all that apply.) b) Which of the following factors make it difficult to evaluate whether game theory applies to real life situations? (Check all that apply.)
a) A game in which Ronny and Stella have two options to either accept or to reject. A game of rock-paper-scissors. b) The payoffs are not precisely known. Individuals may differ from each other in many aspects.
a) Which of the following describes a monopolist's demand curve? b) graph
a) A y-intercept of $8 and downward-sloping with a slope of -1. b) both lines start at y-int
In an economy, if the government implements a law for individuals that requires them to save at least 25% of their annual income in a social savings plan framed by the government. For supporting this plan, the government raises revenues by implementing income tax rates that are higher compared to the other countries. a) Which of the following will be a result(s) of this scenario? b) Which of the following arguments is not consistent with paternalism? c) Which of the following functions is beyond the scope of economics as far as government intervention is considered?
a) An increase in costs to the government. An increase in the deadweight losses. b) Individuals make choices that reflect their true preferences and know what is best for them. c) To make a value judgment on whether government is good or bad.
a) In which of the following situations can an externality be internalized by using the Pigouvian subsidy? b) By introducing Pigouvian subsidies, the government can ____ the equilibrium quantity towards the socially optimal level. c) Which of the following statements is true if this externality is to be internalized? d) The Pigouvian subsidy creates a ____ that is identical to the MSB curve by having individuals consider the externality when making their choices. e) Which of the following is common between corrective taxes and corrective subsidies?
a) An orchard is placed next to a beehive. So, both the farmer and the beekeeper benefit from each other. Sophia's flower garden provides a pleasant view for her neighbors. b) increase c) The Pigouvian subsidy equals $500 and the difference between the demand curve and the MSB curve equals $500. d) virtual demand curve e) It exactly aligns private and society's incentives. It provides a greater incentive to deal with the externality problem rather than the command-and-control approach.
a) The table on the right shows trade statistics for 2012. According to the data, which of the following countries are net exporters? (Check all that apply.) b) According to the data, which of the following countries are net importers? (Check all that apply.)
a) Burkina Faso, Chad, Denmark, Norway, San Marino, Vietnam b) Aruba, Bahamas, Costa Rica, Latvia, Malta, Tanzania
You are the County Commissioner of Hazard County. Jeb brings a complaint before you that Dwight's hog farm is creating a terrible odor. a) Your first instinct is to tell the neighbors to work it out among themselves. The ____ provides theoretical support for private bargaining as an effective approach to ____. b) According to this theoretical principle, ____ will only work as a solution if Jeb ____ have a right to clean air. c) Private bargaining is ____ likely to be successful the more parties involved because of ____.
a) Coase Theorum , internalize the externality b) private bargaining , does c) less , increased transaction costs
a) Which of the following is not an important determinant of wage inequality within an economy? b) Human capital is the ____. c) Compensating wages are the wage premiums ____.
a) Differences in connections to influential people. b) A and B only. c) paid to attract workers to occupations to otherwise undesirable jobs.
a) In which of the following figures is the positive relationship best explained by the peer effect? b) A group of college students are rallying for a political campaign to persuade people to vote for their candidate. This is an example of which of the following influences?
a) Figure A. b) Indoctrination
The Responder moves first and decides pre-emptively whether to accept or reject whatever split the Proposer eventually determines. If the Responder chooses to reject, both players get nothing; but if the Responder accepts, then the Proposer decides how to split the $10.00 between the two players. a) Given this information, which of the following statements is true of the behavior of the Proposer if he acts efficiently? b) Which of the following are likely to happen in practice?
a) He will prefer to keep the entire $10.00 for himself and offer nothing to the Responder. b) The Proposer may feel obliged to the Responder for providing an opportunity to split the $10.00. If the game is played repeatedly, the Proposer will offer positive amounts to ensure the Responder pre-emptively chooses accept in future rounds.
a) Why is national defense better off as a natural monopoly? b) An example of an industry or service that is a natural monopoly is ____
a) Industries like national defense experience economies of scale since they have high fixed costs. Thus, it is cheaper to have a single firm provide a larger quantity. b) city drinking water
Fill in the type of market that matches each feature mentioned below. a) Firm sets market price depending on other firm's market price. b) Firms with zero ability to affect price. c) A product with no close substitutes. d) Which of the following is not an example of monopolistic competition?
a) Oligopoly. b) Perfect competition. c) Monopoly. d) Pharmaceuticals.
a) Taxing Dwight's hog production is an example of ____ b) Before the tax goes into effect, Dwight will produce ____ thousand hogs and sell them for a price of $____ per pound. c) The efficient tax is $____ per pound. d) After the tax goes into effect, Dwight will produce ____ thousand hogs and sell them for a price of $____ per pound. e) As a result of the tax, supply ____, price ____, and the negative externality ____.
a) Pigouvian taxation b) 5 , 5 c) (7.36-5) = 2.36 d) 3.79 , 6.21 e) decreases , increases , decreases
You are the County Commissioner of Hazard County. Dwight's neighbors bring a complaint before you that Dwight's hog farm is creating a terribleodor, and they are demanding government action. a) Which of the following is not a course of action that you could take to satisfy the neighbor's demands? b) You decide to respond to the neighbor's complaints by limiting the number of hogs that Dwight can have on his farm. This is an example of using a ____ c) If you were to recommend a command-and-control approach, a disadvantage would be that it ____
a) Private bargaining. b) command-and-control approach c) creates few incentives for innovation.
a) There are 10 workers in Thailand and each can produce either 4 computers or 60 tons of rice. There are 20 workers in the United States and each can produce either 10 computers or 80 tons of rice. Draw the production possibilities curve for each country. b) In Thailand, the opportunity cost of computers is ____ tons of rice c) In the United States, the opportunity cost of computers is ____ tons of rice d) ______ a comparative advantage in the production of computers. e) In the absence of trade, if Thailand consumes 300 tons of rice, it can consume ______ computers f) In the absence of trade, if the United States consumes 100 computers, it can consume ______ tons of rice
a) Thailand: (0,600)(40,0) a) US: (0,1600)(200,0) b) 60/4= 15 c) 80/10= 8 d) The United States has e) 20 f) 800
a) Which of the following statements are true regarding first-degree price discrimination? b) consumers get charged different rates depending on their electricity consumption. c) senior citizens get discounts on the purchase of medicines. d) a bookstore has an offer of buy two get one free. e) a clothing store has an offer of 50 percent discount on the purchase of three shirts,
a) The consumer surplus is zero. There is extreme inequity in the allocation of surplus. b) Second-degree price discrimination c) Third-degree price discrimination d) First-degree price discrimination e) Second-degree price discrimination
a) Which of the following statements are true after considering the given graph? b) Therefore, price elasticity of demand at a price above $4 is ____. (price is at $7) c) At $4, the price elasticity of demand for the good is ____.
a) The marginal revenue of the good is positive for a quantity below 400 million. The total revenue of the good is maximized at a quantity of 400 million. b) elastic c) one
Two gas stations, A and B, are locked in a price war. Each player has the option of raising its price (R) or continuing to charge the low price (C). They will choose strategies simultaneously. If both choose C, they will both suffer a loss of -$25 a) Does either player have a dominant strategy? Explain. b)
a) The stations do not have dominant strategies because what works best depends on what the other station does. b) The Nash equilibria are for Station A to pick C and Station B to pick R and for Station A to pick R and Station B to pick C.
a) How is a monopolistically competitive market similar to a perfectly competitive market? b) Which of the following common features do monopolistically competitive markets and monopolies share?
a) There are no restrictions on the entry of new firms. b) Firms face downward-sloping demand curves.
Let us consider a duopoly with homogeneous products, where two competing firms pick price (Bertrand duopoly). Suppose that Dogwood's marginal cost (MC)= $60 and Rose Petal's marginal cost (MC)= $25. Assume firms can set prices such as $29.99. a) Which of the following is true if both firms set a price as high as $80? b) Which of the following is true if both firms set a price equal to the lower marginal cost of $25. c) Which of the following is true if both firms set a price equal to their respective marginal costs? d) In the Nash equilibrium ____ and the price will be equal to ____.
a) This is not a Nash equilibrium because both firms will have an incentive to charge a price slightly lower than $80. b) This is not a Nash equilibrium because Dogwood would be losing money and could not afford to price at this level. c) This is not a Nash equilibrium because Dogwood would not be able to sell any of the product since Rose Petal has a lower price. d) only Rose Petal produces , $59.99
a) Which of the following best describes the relationship between price (P), marginal revenue (MR), and total revenue (TR)for a monopolist? b) graph
a) When MR is positive, TR is rising, and when MR is negative, TR is falling. b) negative parabola shape
The figure at right shows a production possibilities curve (PPC) for Joe. He can spend his time making pizzas or chocolate cakes. a) For Joe, which production points are attainable? b) For Joe, which production points are efficient?
a) a-b-d-e (within and on line) b) a-b (on line)
a) Draw the market demand curve for public goods on Panel (c) with the help of the following information given in the demand schedules that are drawn on Panel (a) and Panel (b): b) Why do public goods suffer from a free-rider problem?
a) add Emily and Ron up to get graph b) Because the consumer consumes more than their fair share. Because nonpayment does not prevent consumption. Because the consumer pays less than their fair share of its cost.
Ray earns an income of $225,000 per year in Country X. Suppose for the year 2014 there is a proportional tax rate of 20%. Also suppose for the year 2015 that the country follows the federal income tax bracket, as shown below. a) There will be ____ in the income tax paid by Ray in the year 2015 as compared to the year 2014 by $____ b) Government provides health services to individuals who are incapable of paying for it. c) Government issues bonds for the construction of a new plant that treats the waste products emitted from the big factories. d) Government increases taxes as a result of a budget deficit. e) Government increases taxes in order to pay the salary of the doctors working in government owned hospitals. f) Dereck sold his shop to Jazz who wants to open a new salon. Dereck had to pay taxes on the sale of his shop. This tax is levied by ____ g) The tax paid while purchasing a cocktail at a bar is levied by ____ h) ABC Ltd., is an international company that pays taxes every year on its profits. This particular tax is levied by ____
a) an increase , 12855.24 b) Redistributing funds via transfer payments. c) Raising revenues. d) Correcting market failures and externalities. e) Financing operations. f) the state and local governments. g) the federal government. h) the federal, state, and/or local governments.
a) When a country engages in free trade, the "winners" _____ compensate the "losers." b) If there are no "losers" in free trade, does it matter if wages and employment fall when a country engages in free trade?
a) can b) Yes, the government might not be able to effectively carry out such welfare transfers
a) In a zero-sum game the players are better off by b) Which of the following is not an example of a zero-sum game?
a) choosing a mixed strategy because it enables randomization b) A brutal and terrible war between two nations that significantly impaired civil life. A trade agreement that increases gains for both of the nations involved.
a) In a trust game that is only played once, you would be most inclined to trust someone who ____ b) Suppose there is a new website called Badtipper.com, where restaurant servers post pictures of bad tippers along with scathing commentary. Knowledge of this website is most likely to change the behavior of individuals with a ____
a) claims she gains happiness from helping others. b) low degree of social preferences.
a) The tragedy of the commons results when ____. b) Which of the following best illustrates the tragedy of the commons?
a) common pool resources are overused. b) Overfishing in public waters.
Suppose the government grants an individual or company the exclusive right to intellectual property. a) In this case, the government is granting a ____. b) Which of the following is not likely covered by a copyright?
a) copyright b) a way to improve an existing machine.
Suppose the government passes a law that requires firms to offer health insurance to their workers. The cost of the insurance is equal to $1 for each hour an employee works. a) How will this law affect firms' demand for labor? b) How will this law affect the supply curve of labor? c) According to your graph, the equilibrium wage ____ and the equilibrium quantity ____. d) How will this law affect the equilibrium quantity of labor in this labor market? How will it affect the equilibrium wage in this industry?
a) demand for labor will shift down by $1 b) supply of labor will shift down by $1 c) falls , stays the same d) The equilibrium wage and quantity both decline, with the wage declining less than in the previous case where workers consider the insurance to be the equivalent of $1 in wages.
a) Direct regulation is ____. b) Examples of direct regulation include ____.
a) direct actions by the government to control the amount of an activity. b) antismoking laws , price ceilings , zoning restrictions
a) The figure at right shows the U.S. market for tennis shoes where the U.S. is an importer. The U.S. currently has a tariff on imported tennis shoes. Suppose the U.S. decides to eliminate the tariff. b) When the tariff is eliminated, the quantity supplied by domestic producers ______ c) When the tariff is eliminated, the quantity demanded by domestic consumers ______ d) When the tariff is eliminated, what is the impact on domestic producers, foreign producers, and domestic consumers?
a) draw line below tariff+world b) decreases c) increases d) Foreign producers and domestic consumers win. Domestic producers lose.
a) California wine that is sold in New Jersey is an ___ for California and an ___ New Jersey b) You take a vacation in Paris, France. Your vacation is an ___ for the United States and an ___ for France c) A construction company in China buys tractors from Caterpillar, which is based in Illinois. The tractors are an ___ for China and an ___ for Illinois. d) You go to your doctor in Cincinnati, Ohio, and she takes an x-ray of your broken arm. The x-ray is read by a technician in Mumbai, India, and he sends a report via email to your doctor. The reading is an ___ for India and an ___ for the United States.
a) export , import b) import , export c) import , export d) export , import
a) In the domestic economy when outsourcing exists, prices _____, social surplus _____, and labor market welfare _____. b) The economy as a whole benefits from outsourcing if the gain in social surplus is _____the losses in labor welfare.
a) fall, increases, decreases b) greater than
a) Mermaid Corporation had employed some number of workers at an equilibrium given by point E in the graph. In the following year, the firm implemented a labor-saving technology that is a substitute for labor. As a result, the equilibrium wage rate ____ b) graph c) It was observed that the poor marketing skills of a toy company named Hamleys decreased the demand for their toys,which caused the leftward shift in the demand curve of toys. This shift ____ the price of toys. d) Such a change in the price of toys will cause the VMPL and wages to ____,leading to the ____ in the demand curve for labor.
a) falls b) demand shifts left c) decreases d) decrease , leftward shift
a) The largest source of revenue for the federal government is ____. b) The sources of revenue for state and local governments are ____ those of the federal government. c) Which of the following is the largest source of revenue for state governments?
a) individual income taxes. b) different from c) Miscellaneous taxes and fees, such as tolls on roads and public transportation tickets.
The European Union banned certain pesticides for two years after studies found links between the use of these insecticides and a decline in the bee population. a) This outcome ____ socially efficient. b) draw and graph new supply c) This outcome ____ socially efficient.
a) is not b) below current supply c) is
Many cities tax or ban plastic grocery bags. The rationale for these taxes and bans is an externalities argument: plastic bags are an eyesore, take up space in landfills, and damage fish, birds, and other wildlife. a) this outcome ____ socially efficient b) this outcome ____ socially efficient
a) isn't a) is
a) Technologies that complement existing labor inputs are known as ____ technologies. b) With this type of technological change, the marginal productivity of existing labor inputs will ____. c) graph d) The consequence for workers will be a wage rate that is ____ and hours of employment that are ____.
a) labor-complementary b) increase c) demand shifts right d) higher , higher
a) Technologies that substitute for existing labor inputs are known as ____ technologies. b) With this type of technological change, the marginal productivity of existing labor inputs will ____. c) graph d) The consequence for workers will be a wage rate that is ____ and hours of employment that are ____.
a) labor-saving b) decrease c) demand shifts left d) lower , lower
a) An information cascade is when we ____. b) An example of an information cascade is ____.
a) make choices based on the decisions of others. b) restaurants that become suddenly popular.
a) The demand curve slopes downward because ____ productivity falls as more workers are employed. b) The supply curve slopes upward since the opportunity cost of leisure ____ following an increase in the wage. c) graph d) According to the graph, the consequence of the change in perception is a ____ market wage and a ____ level of employment.
a) marginal b) rises c) supply shifts right d) lower , higher
You have just been appointed as the County Commissioner of Hazard County. You realize that you should learn some economic concepts that will be useful to you in your new job. a) In a free market, efficient firms will produce where ____ equals ____. b) ____ is maximized when firms produce at equilibrium in a free market. c) Which of the following is not an example of when the free market fails to generate maximum social surplus?
a) marginal cost , marginal revenue (MC=MR) b) total surplus c) private goods
a) Because this firm is competitive and has no control over its product's price, the declining values for VMPL are a result of diminishing ____ b) When the VMPL is plotted in a diagram with the number of workers measured along the horizontal axis, the resulting curve (connecting the plotted points) is the firm's ____. c) According to your diagram, the profit-maximizing level of employment for this firm is ____ workers.
a) marginal productivity b) demand for labor c)
a) fill out marginal in table (difference between current and last number) b) Is the relationship between output and labor consistent with the Law of Diminishing Returns? c) If the price of output is $9 and the wage rate is $27, your firm should hire ____ worker(s
a) marginal: (12, 11, 9, 6, 4, 3) b) Yes, the marginal product declines as successive units of labor are hired. c) 6 workers (27/9=3=worker6)
You observe a market where in the long run firms earn zero economic profit, consumer and producer surplus is not maximized, and when a new firm enters the market, the price of similar products decrease. a) You are most likely observing a ____. b) The market conditions of this industry are those of: c) Consider a market structure in which there are only a few firms. These firms face a downward sloping residual demand curve with some entry barriers in the long-run. These conditions are satisfied by ____ market structure. In this market, if there are zero economic profits, then it reflects a situation of ____. If there are more than zero economic profits, then it depicts a case of ____.
a) monopolistically competitive market b) a monopoly. c) an oligopolistic , homogenous products in the long-run , differentiated products in the long-run
You are the County Commissioner of Hazard County. Jeb brings a complaint before you that Dwight's hog farm is creating a terrible odor. a) The noxious odor from Dwight's hog farm is a ____ b) If this externality from Dwight's farm is left unaddressed, then Dwight will continue to ____ in regards to the social surplus optimum. c) Which method is not a recommended approach supported by externality theory to deal with this problem?
a) negative externality b) overproduce c) nonprofit intervention
a) Which of the following is not one of the sources of natural market power? b) Which of the following best describes network externalities? c) graph d) Using the graph, a firm with that type of cost curve is best suited to be
a) owning a firm in a small community b) They occur when a product's value increases as more consumers begin to use it. c) graph at points mentioned d) a natural monopoly, since it faces economies of scale and can produce at a lower cost if done by one firm.
Suppose the government grants an individual or company the sole right to produce and sell a good or service. a) In this case, the government is granting a ____. b) Which of the following is not likely covered by a copyright?
a) patent b) a new drug
a) The price control set by the government in this situation is a ____ b) Using the line drawing tool,draw a price control line and label it 'Price Control'. c) There is a possibility of forming a black market by the seller, if there is a ____ d) If a price floor is set below the free market equilibrium price, then the quantity demanded ____
a) price ceiling b) graph line below equilibrium c) price control d) remains unaffected
a) In an economy, the government sets a price control for a good. The suppliers notice that due to this price control, the consumers buy less of their good causing their inventories to rise. This price control set by the government is known as ____ b) Show this price control line on the graph, where the equilibrium price is Pm and equilibrium quantity is Q. Using the line drawing tool,draw the price control line. c) If the implementation of a price control results in a deadweight loss, which of the following statements is true?
a) price floor b) graph line above equilibrium c) There is excess demand.
Britain taxed windows from 1696 until 1851. Under the 1747-1757 tax rates, you would pay no tax if your home had 0-9 windows, but if your home had 10-14 windows you would pay a tax of 6 pence per window for every window in your home. a) The window tax is similar to the U.S. income tax in that both are ____. b) The window tax is different from the U.S. income tax in that as windows increase, ____ c) Do you think from 1747-1757 the number of new homes with 9 or fewer windows increased from the pre-1747 days?
a) progressive taxes. b) Britain's window tax increases for all windows, and as income increases, the U.S. income tax rate increases on marginal income. c) Yes, because the marginal cost of having more windows increased.
a) The graph shows the production possibility curves for William and Michael. Based on the graph, William has the comparative advantage in producing ______. His opportunity cost of producing this good is ______ of the other good. b) Which of the following statements will be true for William and Michael in the above scenario?
a) refrigerators, 3/4 b) Each would specialize in the good he has a comparative advantage in producing. They will carry out trade to be better off.
A country has two types of workers, skilled and unskilled. Workers can produce either computers or steel. Output per worker is as follows: a) According to the data, ______ an absolute advantage in making either type of good. b) ______ a comparative advantage in making computers c) ______ a comparative advantage in making steel
a) skilled workers have b) skilled workers have c) unskilled workers have
a) In the taxi cab industry, the salary for male drivers is higher than for female drivers. b) A company has an opening for an accountant and one of the requirements is that the candidate should be a woman younger than 30 years old. c) Robert, the son of a famous actor, starts his acting career as the lead in an upcoming Hollywood psychological thrillermovie, without auditioning. d) Which of the following is an example of a skill-biased technological change?
a) statistical discrimination b) Taste-based discrimination c) Taste-based discrimination d) Ted, a recent graduate who has won many software development competitions is chosen over Marshall who has worked on a particular software at an IT company for 15 years.
a) A first-mover advantage occurs if ____ b) Suppose you were playing rock-paper-scissors as an extensive from game; first you choose rock, or paper, or scissors, and then your opponent makes a choice. Is there a first-mover advantage in this game? c) Two firms are thinking of entering a new market. If one enters it will be successful but if a second enters both will suffer very large losses. Is there afirst-mover advantage in this game?
a) the first mover to act in a sequential game gets a benefit from doing so. b) No, if you show your move first you will lose every time. c) Yes. The firm that goes first can enter and the firm that goes second will have no incentive to enter.
a) Based on your conversations today and your economics experience, you conclude that when externalities are present, ____ b) Furthermore, you conclude that when there are negative externalities present, free markets ____, and when there are positive externalities present, free markets ____ c) graph
a) the free market outcome is not efficient b) produce too much, produce too little
a) A production function shows ____. b) According to the Law of Diminishing Returns, ____.
a) the number of workers employed and the corresponding output levels that will be produced. b) the marginal productivity of an additional unit of labor eventually decreases as the quantity of labor increases.
a) Tax incidence refers to ____. b) Is the entire burden of the tax always borne by those on whom it is imposed?
a) who bears the burden of a tax. b) Not necessarily, since the burden of the tax depends on price elasticity.
All of the following could cause an increase in producer surplus except:
an upward shift in the marginal cost curve
On the Production Possibilities Curve, possible production levels are represented:
at any point on or below the curve
If you produce at a point on your PPC, then you are producing at a point that is ______.
attainable and efficient
The labor demand curve will shift leftward when:
a labor-saving technology is introduced.
b) Which of the following relationships are not true in the case of a competitive firm trying to maximize its profit? c) For Hewlett-Packard (HP), the demand for software engineers is ____ from the production of HP laptops.
b) Wages=Marginal=VMPL Wages=Marginal=Price c) derived
In which of the following ways is a monopoly beneficial to an economy?
d. All of the above
Social surplus is maximized when the ______
d. All of the above
Oligopolistic firms that sell differentiated products determine their prices when prices are
determined simultaneously by the firms as best responses given other firm prices.
Graph of a perfectly elastic supply
horizontal
The long-run supply curve in a perfectly competitive market is: The long-run supply curve in a perfectly competitive market states that:
horizontal the long-run quantity can vary while the equilibrium price returns to the price at the minimum of the average total cost
Graph of perfectly elastic demand
horizontal line
Consider an experiment on soliciting donations for a children's hospital. Experimenters put flyers on doors saying that solicitors would be coming to their house at a particular time. Fewer people opened the door when they knew that a solicitor would be coming, but those who did gave more money,on average, than others who did not know. From the results of this experiment, you can infer that people give due to _____.
impure altruism, because of social pressures.
The figure on the right shows the typical firm in a perfectly competitive industry. Equilibrium in the market is currently yielding a price of $30 At this price, the typical firm earns a ___ economic profit As a consequence of the current short-run conditions in this industry, it may be expected that firms will ______ this market. As this movement of firms occurs, economic profits for the typical firm will ______.
negative leave --
The figure on the right shows the typical firm in a perfectly competitive industry. Equilibrium in the market is currently yielding a price of $70 At this price, the typical firm earns a ___ economic profit As a consequence of the current short-run conditions in this industry, it may be expected that firms will ______ this market. As this movement of firms occurs, economic profits for the typical firm will ______.
positive enter approach zero
In terms of economic profits, early market entrants earn _____ economic profits and the last entrant earns _____ economic profits.
positive zero
Why is it difficult for the market to deliver socially efficient quantities of goods like clean air or street lighting? These are examples of ____; therefore, even if you ____ for the good you still ____.
public goods , do not pay , get to enjoy it
Positive externalities result in a ____ shift of the ____ curve. There ____ a deadweight loss with a positive externality.
rightward , demand , is
Using your graph, the slope of the industry demand curve demonstrates
the realistic assumption that the Law of Demand holds for the good under consideration
A dominant strategy equilibrium exists if
the relevant strategy for each player is a dominant strategy.
One significant difference between extensive-form and simultaneous-move games is ____
the timing of moves changes in extensive-form games.
This occurs because
there are many producers all selling identical goods, meaning no one firm can impact the market price
A producer will continue to rent capital until the ____ equals the rental rate. Just like with labor, all decisions are made ____.
value of the marginal product of physical capital (VMPK) at the margin
Graph of a perfectly inelastic demand
vertical line
Social surplus is the ______
total value from trade in the market
Martha runs a business that makes designer jeans. Each of the seamstresses she employs uses one of the sewing machines on the factory floor. In the short run, the seamstresses are a ________ factor of production and the sewing machines are a _________ factor of production. The output of each seamstress is considered the ________ product
variable fixed marginal
In contrast, suppose Louis Corporation wouldn't be able to increase its profits if it decided to shift from the clothing industry to the IT industry. In this case, the economic profits of Louis Corporation in the clothing industry are:
zero
a) When the nation imposes a tariff, the imports of the nation falls to ______. However, government revenue increases by _____ and producer surplus increases by _____. b) This nation may not favor imposing tariffs on imports because _____ c) Which of the following nations will be against free trade?
a) Q2-Q3 , area D , area B b) it raises prices for consumers c) A defense-oriented nation. A nation who wants to preserve their cultural uniqueness.
A flood that destroys a great deal of the corn crop. This will ______ corn prices by shifting the supply curve for corn ______. A fall in the price of wheat (a substitute for corn). This will ______ corn prices by shifting the demand curve for corn ______ A change in consumer tastes away from corn dogs toward hot dogs. This will ______ corn prices by shifting the demand curve for corn ______ An increase in the number of demanders in the corn market. This will ______ corn prices by shifting the demand curve for corn ______
increase, leftward decrease, leftward decrease, leftward increase, rightward
Negative externalities cause a ____ shift of the supply curve and ____ in market quantity. Recognizing this deadweight loss ____ result in elimination of the externality.
leftward , decrease, will not
The amount of money the firm brings in from the sale of its outputs is called ______, while the change in total revenue associated with producing one more unit of output is called _______
revenue marginal cost
The figure on the right displays the market for video game consoles, where nine buyers are interacting with nine sellers. 1. According to this figure, the equilibrium price is $______, and at that price,the equilibrium quantity is ______. 2. When the market is in equilibrium, social surplus is $______ 3. If the number of consoles is restricted to two less than the equilibrium quantity, social surplus is $______ 4. Alternatively, if the government mandated that one more video game console than equilibrium be transacted, social surplus is now $______ 5. From this analysis, it can be concluded that a market in competitive equilibrium ______ social surplus.
1. 250, 5 2. 1000 3. 900 4. 900 5. maximizes
The equilibrium rent in a town is $500 per month, and the equilibrium number of apartments is 100. The city now passes a rent control law that sets the maximum rent at $400. The diagram on the right summarizes the supply and demand for apartments in this city. A) consumer surplus B) producer surplus C) social surplus
Before rent control: A) A + B B) C + D + F C) A + B + C + D + F
From the positions the curves hold in each graph, it can be deduced that the older, less efficient facility is ______ If video games are produced in a competitive market and the current price is $70, production in Alpha is ____ thousand units and production in Beta is ____ thousand units. If management sought to transfer 10 thousand units of Beta's production to Alpha, the firm's overall profits would ______, since for those 10 thousand additional units ______.
Beta 70 - 60 decrease, MC Beta < MC Alpha
In Table 3, show the change in consumer surplus, producer surplus and social surplus resulting from the rent control law. A) consumer surplus B) producer surplus C) social surplus
Change A) C-B B) -(C+D) C) -(D+B)
Perfectly elastic: Relatively elastic: Unit Elastic: Relatively inelastic: Perfectly inelastic:
E = ∞ 1 < E < ∞ E = 1 0 < E < 1 E = 0
Given the shape of the curves, we know that curve A represents______, Curve B represents _____, and Curve C represents ______
MC, ATC, AVC
Consider a perfectly competitive market as shown in the given graph. Suppose the initial price of a product is $1.40 per unit. At this price, the marginal revenue (MR) curve faced by a firm is:
MR1
In a perfectly competitive market, all of the following statements are true except
Marginal revenue is equal to price times quantity
thinks that the government should intervene to revive declining industries like video stores and print newspapers. The government, she reasons, can resolve the coordination problem of getting the agents in these markets to trade. Do you agree with her? Explain your answer.
No, these industries are declining not because of coordination problems but, rather, because of falling demand.
Larry Krovitz is a salesman who works at a used-car showroom in Sydney, Australia. It's the last week of July, but he is yet to meet his sales target for the month. A customer, Harold Kumar, who wants to buy a Ford Fiesta, walks into the showroom. After taking one of the cars for a test drive, Harold decides to buy it. While $13000 was the least that Larry would have been willing to accept for that car, he quotes a price of $19000. After some bargaining, the car is sold for $14000.
Producer Surplus: $1000 Profit: $1000
Is producer surplus always equal to profit?
Producer surplus equals profit when marginal cost and average total cost can be represented with the same curve
a) The price of tennis shoes in the United States with trade is $___ b) Draw the world price line on Figure 2 to help determine whether the United States is an importer or an exporter. c) With trade, the United States is an ______
a) 40 (wrldmrkt price) b) draw horizontal line c) exporter (if above price equilibrium)
g) If Thailand continues to consume 300 tons of rice, it will be able to consume ___ computers under this proposal. h) If the United States continues to consume 100 computers, it will be able to consume ___ tons of rice under this proposal. i) Thailand ___ accept this proposal, and the United States ___accept this proposal.
g) (1x4)+20=24 h) (8x80)+240=880 i) should , should
Fixing up old houses requires plumbing and carpentry. Jack is a decent carpenter and a decent plumber, but is not particularly good at either. He can fix up three houses in a year if he does all of the carpentry and plumbing himself. His wage is $40,000 per year.
($40,000)/(3 houses)=$13,333
Which of the following equations measures price elasticity of supply?
(% change in quantity supplied)/(% change in price)
Calculate consumer surplus, producer surplus, and social surplus when the price is $40,000.
1+3+4=190k 40k x 3 = 120k consumer surplus: 190-120=70k firms D,A,C: 20+30+40=90k producer surplus: 120-90=30k social surplus: 90+30=100k
What is the difference between a pure strategy and a mixed strategy?
A pure strategy involves choosing one action, while a mixed strategy involves choosing different actions randomly according to preassigned probabilities.
Monopolistically competitive firms earn zero economic profit in the long run as do perfectly competitive firms. Does this mean that total surplus is maximized in a monopolistically competitive market?
No, because firms produce where price is greater than marginal cost
There are many identical firms with a simple cost structure: Total cost for Q = 0 is $6 and total cost for Q = 1 is $8. Each firm is incapable of producing anything more; in other words, total cost is infinite for any Q larger than 1.
In the given scenario, the fixed cost for each firm is $6 In the short run, the equilibrium price will be $2 If firms are free to enter and exit this market, the long-run price will be $8
Consider a perfectly competitive market and fill in the following blanks. In the long-run, there are: _____. The long-run average total cost curve (ATC) lies_____the short-run ATC. The long-run supply curve is the portion of the marginal cost (MC) curve that lies above the_____curve.
No fixed factors of production below average total cost
Suppose one firm accounts for 55 percent of the global market share for a product, while 147 other firms account for the remaining 45 percent of the market. With such a large number of buyers and sellers, is this market likely to be competitive?
No, even though there are many firms in the market, there is one firm large enough to influence the market price
Does price gouging have the same effect as setting prices above equilibrium level?
No, price gouging is actually an equilibrium outcome, while the setting of prices above equilibrium is not.
Which of the following is a justification to use taxes for social reallocation instead of relying on charity?
People are less charitable to those they don't know.
Consider a trust game between two players. Suppose the players care only about their own payoffs. The payoffs are such that, in equilibrium, the players do not trust each other, leading to a socially inefficient equilibrium. How could the game be changed so that in equilibrium the players do trust one another?
Play the game multiple times
A perfectly competitive firm will choose to shut down when the_____intersects the marginal cost curve below the_____
Price (marginal revenue) average variable cost curve
a) The total tax payable for an individual who earns $500,000 a year is $____ b) The marginal tax rate is ____ percent c) The average tax rate is ____ percent
a) 155,763.75 b) 39.6 c) 31.15
Suppose there are four firms in an industry, each with an equal market share. a) The Herfindahl-Hirschman Index (HHI) for this industry is ____
a) 2500
a) Paternalism is the view that ____ b) Consumer sovereignty suggests that ____
a) people do not always know what is best for them, and government should encourage them to make the right choices. b) government should not interfere with consumer choices.
a) Market power relates to the ability of sellers to affect ____, and arises because of ____. b) Legal market power is created by ____, and arises due to ____. c) Natural market power is created by ____, and arises due to ____.
a) prices; barriers to entry. b) the government; patents. c) market forces; economies of scale.
A weather pattern that produces a bumoer corn crop: This will ______ corn prices by shifting the supply curve for corn ______ A rise in the price of wheat (a substitute for corn). This will ______ corn prices by shifting the demand curve for corn ______ A decrease in the number of demanders in the corn market: This will ______ corn prices by shifting the deamdn curve for the corn ______ An increase in the number of demanders in the corn market. This will ______ corn prices by shifting the demand curve for corn ______
decrease, rightward increase, rightward increase, rightward increase, rightward
In the Dictator Game, the allocator decides how a certain sum of money is to be divided, and the recipient must accept whatever choice the allocator makes. Relative to when the allocator is anonymous, when the allocator instead sees the recipient, the allocator is more likely to _____.
divide the money equally due to social pressures.
in a perfectly competitive market, a firm with multiple production plants will minimize total costs of production when:
each plant produces where marginal revenue equals marginal cost
The graph on the right illustrates a marginal cost (MC) curve and marginal revenue (MR) curve for a monopolist. If the firm produces at a quantity of 40 units, then marginal revenue would be____ marginal cost, and this firm would____.
greater than; produce more to enhance profits
A local baseball team is in the middle of a slump. Your neighbor is on the team and he told you that their star pitcher won't play this weekend because he is still injured. However,everyone in the office is talking about why the team will win the playoffs this weekend. You join in on the conversation and agree with your colleagues, exhibiting what economists would call _____. Later, you join the office pool in placing a bet on the team, an example of _____.
herding , information cascade
In a market economy, the alignment of interests is accomplished through the use of ______.
prices
If both players choose Foe, then each walk away with nothing. The payoffs from a $60 trust fund are illustrated in the figure on the right for you and your friend, Dao. The Nash equilibrium is for _____.
you and Dao to pick Foe.
A monopolistic competitor maximizes profits by producing 180 hamburgers per day. At this quantity, his average total cost is $5, and his average variable cost is $2. He charges $4 per hamburger. a) The firm would generate an economic loss of $____ b) In this case the monopolistic competitor should:
a) 180 b) keep producing, generating an economic loss in the short run.
a) The total tax payable for an individual who earns $350,000 a year is $____ b) The marginal tax rate is ____ percent c) The average tax rate is ____ percent
a) 99630.75 b) 33 c) 28.47
a) Which of the following equations calculates economic profits for a monopoly? b)
a) Profits = (P-ATC) x Q b)
