Which of the following conditions would distinguish a competitive firm from a monopolist?
a. The existence of a demand curve for the firm.
b. The slope of the demand curve facing the firm.
c. The rule of profit maximization, i.e., produce where MR = MC.
d. The relationship between marginal revenue and total revenue.
e. The existence of diseconomies of scale.
B
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According to the Laffer curve, when the tax rate is 100 percent, tax revenue will be:
a. 0. b. at the maximum value. c. the same as it would be at a 50 percent tax rate. d. greater than it would be at a 50 percent tax rate. e. the same as it would be at a 20 percent tax rate.
Which of the following is an argument against balancing the federal budget?
A. Doing so may prevent the government from pulling the economy out of recession. B. An increase in government spending and taxes by the same amount does not affect income. C. The economy will self-adjust so deficit spending is not necessary. D. None of the choices are correct.