The labels for the axes of the aggregate demand graph should be ________.
A. quantity of a product on the vertical axis and the price of a product on the horizontal axis
B. real domestic output on the vertical axis and the price level on the horizontal axis
C. real domestic output on the horizontal axis and the price level on the vertical axis
D. price of a product on the vertical axis and quantity of a product on the horizontal axis
Answer: C
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A tax that is higher for men than for women violates the criterion of
a. horizontal equity. b. vertical equity. c. the ability-to-pay principle. d. the marriage tax.
To be able to engage in profit-maximizing price searching, a monopoly firm must be able to
A) prevent the entry of other firms into the market for its product. B) induce the entry of other firms into the market for its product. C) avoid earning negative economic profits in the short run. D) always earn zero economic profits.