To minimize costs, firms should have plants close to every market

The tax wedge is the difference between the

A) amount of taxes needed to pay off the national debt and the actual amount of taxes. B) nominal and real interest rates. C) pretax and posttax returns to an economic activity. D) amount of taxes needed to balance the federal budget and the actual amount of taxes.

Tim Tupper contracts with two other students to help him provide a term paper-typing service. In the last two weeks of the semester, he sees a tremendous increase in demand. His profit-maximizing response would be represented by

a. a rightward shift of the supply curve because it is possible to earn economic profits b. a rightward shift of the supply curve because the increase in demand is probably only temporary c. a reduction in supply to take full advantage of the increase in demand d. a movement up to the right along the supply curve because the increase in demand is probably only temporary e. an upward movement in horizontal demand curve he faces because now he can charge a lower price