For a profit-maximizing monopolist
A) P > MC.
B) P = MC.
C) P = MR.
D) P = ATC.
A
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To separate the income and substitute effects, the imaginary budget line should be
A) tangent to the new indifference curve and parallel to the new budget line. B) tangent to the new indifference curve and parallel to the old budget line. C) tangent to the old indifference curve and parallel to the new budget line. D) tangent to the old indifference curve and parallel to the old budget line.
A firm should not necessarily shut down if:
a. total revenue is less than total variable cost. b. firms suffer losses and the price is above variable costs. c. the demand curve facing the firm lies below its average variable cost curve. d. price is less than average variable cost. e. firms suffer losses and the price is below variable costs.
How does the theory of efficiency wages explain above-equilibrium wages?
a. Employers are forced by competition to pay higher wages in efficient markets. b. Employers give their workers a higher wage in the hope that it will lead to increased productivity. c. Workers get higher wages when they prove they are increasing their productivity. d. Workers demand higher wages to compensate for poor fringe benefits.
If federal tax rates increased, what would happen to the interest rate on municipal bonds?