In monopolistically competitive markets, positive economic profits
a. suggest that some existing firms will exit the market.
b. suggest that new firms will enter the market.
c. are sustained through government-imposed barriers to entry.
d. are never possible.
b
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If there was a federal budget surplus it would make it possible to
A) decrease taxes in order to improve the equity and efficiency of the tax system. B) increase spending on priorities. C) reduce the national debt. D) any of the above.
Suppose an excise tax of $1 is imposed on every case of beer sold and sellers are responsible for paying this tax. How would the imposition of the tax be illustrated in a graph?
A) The supply curve for cases of beer would shift to the right by $1. B) The supply curve for cases of beer would shift to the left by less than $1. C) The supply curve for cases of beer would shift to the left by more than $1. D) The supply curve for cases of beer would shift to the left by $1.