An income tax system is ________ if marginal tax rates increase as income increases.
A) progressive
B) regressive
C) efficient
D) equitable
Which of the following statements is correct?
A) Economic profit takes into account all costs involved in producing a product.
B) Accounting profit is not relevant in preparing the firm’s financial statement.
C) Economic profit always exceeds accounting profit.
D) Accounting profit is the same as economic profit.
Which of the following would be categorized as an opportunity cost?
a. not being able to spend your $10,000 savings if you sink the money in your business
b. the cost of purchasing supplies for your house-cleaning business
c. the cost of purchasing auto insurance for your dry-cleaning delivery business
A) a only
B) a and c only
C) b and c only
D) all of the above
Lucas and Sargent argue that the short-run trade-off between unemployment and
inflation is caused by
A) workers and firms using Fed policy to predict inflation.
B) workers and firms using all the information available to predict inflation.
C) workers and firms rapidly adjusting wages and prices in response to changes in
expectations.
D) workers and firms being fooled by unexpected changes in monetary policy.
What impact would including members of the military in employment, labor force, and
working-age population statistics have on the unemployment rate and the labor force
participation rate?
A) Including members of the military would increase the unemployment rate and
reduce the labor force participation rate.
B) Including members of the military would reduce the unemployment rate and
increase the labor force participation rate.
C) Including the military would increase both the unemployment rate and the labor
force participation rate.
D) Including the military would reduce both the unemployment rate and the labor force
participation rate.
The key characteristics of a monopolistically competitive market structure include
A) many small (relative to the total market) sellers acting independently.
B) all sellers sell a homogeneous product.
C) barriers to entry are strong.
D) sellers have no incentive to advertise their products.
Which of the following would increase net exports in the United States?
A) The United States purchases 500 silver necklaces from Mexico.
B) The government of Mexico purchases 500 Ford F-150 pickup trucks from the United
States.
C) A Mexican citizen purchases 25 shares of stock in Ford Motor Company.
D) The U.S. government donates $5 million to Mexico to help victims of drought in
Mexico.
The Federal Reserve cannot target both the money supply and the interest rate because
it does not control
A) bank reserves.
B) money demand.
C) the discount rate.
D) open market operations.
If the economy receives an influx of new workers from immigration,
A) the long-run aggregate supply curve will shift to the right.
B) the long-run aggregate supply curve will shift to the left.
C) we will move up along the long-run aggregate supply curve.
D) we will move down along the long-run aggregate supply curve.
A monopolist’s profit maximizing price and output correspond to the point on a graph
A) where average total cost is minimized.
B) where total costs are the smallest relative to price.
C) where marginal revenue equals marginal cost and charging the price on the market
demand curve for that output.
D) where price is as high as possible.