A monopolistically competitive firm in the long run ________
A) is inefficient because it makes zero economic profit
B) produces a profit-maximizing amount of output that is less than capacity output
C) is efficient because it makes zero economic profit
D) sets its price equal to its marginal cost
B
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The demand for gasoline is inelastic and the supply of gasoline is elastic. Therefore,
A) sellers bear most of the incidence of a tax on gasoline. B) buyers bear most of the incidence of a tax on gasoline. C) the government bears most of the incidence of a tax on gasoline. D) the incidence of a tax on gasoline depends if the tax is imposed on sellers or on buyers. E) None of the above answers is correct.
The macroeconomist would most likely study
A) the effects of changing apple prices on the market for oranges. B) the effects of an increase in wage rates on a woman's decision to enter the labor force. C) the effects of a lower income tax rates on the nation's total production of goods and services. D) the effect of increased union wages on the cost of producing automobiles.