In the short run, in equilibrium, firms that operate in a monopolistically competitive market face a down sloping demand curve and will charge a price where _____ and ______.
a. quantity produced is maximized; costs are minimized
b. sales revenue is maximized; costs are falling
c. MR = MC; P > average cost
d. average costs are rising; sales are rising
Ans: c. MR = MC; P > average cost
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A sales tax creates a deadweight loss because
A) there is some paper work opportunity cost of sellers paying the sales tax. B) demand and supply both decrease. C) less is produced and consumed. D) citizens value government goods less than private goods. E) the government spends the tax revenue it collects.
Compare the macroeconomic performances in the 1990s of the following countries under the following exchange-rate regimes: floating exchange rates, Mexico and Brazil; capital control, China and Malaysia; and currency boards, Estonia and Hong Kong;
dollarization, Argentina.