For the aggregate supply curve, the profit effect
A. Provides an incentive for producers to decrease output when prices rise.
B. Is temporary in the short run, while in the long run it is canceled out because the cost effect dominates.
C. Dominates in the long run and causes the curve to be upward-sloping.
D. Along with the cost effect causes the curve to be downward-sloping in the long run.
Answer: B
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Hospitals typically include all their sunk costs when deciding how much it costs them to provide services because
A) each patient benefits from the hospital's being adequately equipped. B) hospital administrators have no incentive to be efficient. C) no hospital could continue operating if it wasn't able to cover its sunk costs. D) the payments they receive are largely based on what they say are their costs. E) they are non-profit institutions and hence are in general poorly managed.
Negative income tax plans have the disadvantage of decreasing work incentives in comparison to existing welfare programs without work incentives
a. True b. False Indicate whether the statement is true or false