Perfect competition and monopoly stand at ______ of the spectrum of competition.
A. the low end
B. the mid-way point
C. the high end
D. opposite ends
Answer: D. opposite ends
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If regulators require a monopoly to earn zero economic profit, the monopoly will produce the quantity where
a. the marginal cost curve crosses the average cost curve. b. the marginal cost curve crosses the demand curve. c. the average cost curve crosses the demand curve. d. the marginal cost curve crosses the marginal revenue curve.
Suppose a Chinese restaurant provides free tea to its customers. In the economic way of thinking, the restaurant is
A) engaging in predatory pricing of its meals. B) engaging in predatory pricing of tea. C) selling Chinese food below cost. D) doing all of the above. E) almost certainly doing none of the above.
The above figure shows the Lorenz curve for wealth for the nation of Rusha. What percent of wealth is owned by the wealthiest quintile?
A) 0 percent B) 5 percent C) 40 percent D) 60 percent
Let P be the output price for a particular good. Why is the value P*MPL greater than MRPL for a monopolist?
A) The monopolist is not as technically efficient as firms operating under perfect competition. B) The monopolist hires less labor, so MPL is higher under a monopoly than under perfect competition. C) The monopolist sets a price that is higher than MR. D) A and C are correct. E) B and C are correct.