Hi Phi Sound Unlimited has a monopoly over the installation of surround sound systems. Hi Phi Unlimited's total revenue from installing 15 sound systems is $30,000 and its total revenue from installing 18 sound systems is $33,000. The marginal revenue received from selling the 18th sound system is
A. equal to the price of the 16th sound system.
B. greater than the price of the 16th sound system.
C. less than the price of the 16th sound system.
D. Indeterminate from the given information.
Answer: C
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One "design principle" that makes informal, community-based solutions to public goods and common resource problems more effective is:
A. the government setting clear rules for use. B. individual pledges to self-monitor their actions. C. clear distinctions between who is and is not allowed to access the resource. D. All of these are important to the effectiveness of community-based solutions.
If the slope of an indifference curve between two goods decreases as we move from left to right (dropping all minus signs), we infer that the consumer
a. is less willing to trade away a good when he has a lot of it. b. is more willing to trade away a good when he has a lot of it. c. always tries to keep the percentage of his budget spent on each good constant. d. views one of the goods as inferior.
An active stabilization policy designed to limit the size of government would
a. raise G to eliminate a recessionary gap and lower taxes to eliminate an inflationary gap. b. raise G to eliminate a recessionary gap and raise taxes to eliminate an inflationary gap. c. reduce taxes to eliminate a recessionary gap and raise G to eliminate an inflationary gap. d. reduce taxes to eliminate a recessionary gap and reduce G to eliminate an inflationary gap.
A price-discriminating monopolist with two markets will equate
A) the prices of two markets. B) price and marginal revenue in each of the two markets. C) marginal revenue and marginal cost in each of the two markets. D) average revenue and marginal revenue between the two markets.