If the size of a tax increases, tax revenue will increase. ( )
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The circular-flow diagram illustrates that, in markets for the factors of production, ( )
A. households are sellers, and firms are buyers.
B. households are buyers, and firms are sellers.
C. households and firms are both buyers.
D. households and firms are both sellers.
Compared to the social optimum, a monopoly firm chooses ( )
A. a quantity that is too low and a price that is too high.
B. a quantity that is too high and a price that is too low.
C. a quantity and a price that are both too high.
D. a quantity and a price that are both too low.
In an hour, David can wash 2 cars or mow 1 lawn, and Ron can wash 3 cars or mow 1 lawn. Who has the comparative advantage in car washing, and who has the comparative advantage in lawn mowing? ( )
A. David in washing, Ron in mowing.
B. Ron in washing, David in mowing.
C. David in washing, neither in mowing.
D. Ron in washing, neither in mowing.
When a monopolist switches from charging a single price to perfect price discrimination, it reduces ( )
A. the quantity produced.
B. the firm’s profit.
C. consumer surplus.
D. total surplus.
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