Assume a pure monopolist is currently operating at a price-quantity combination on the inelastic segment of its demand curve. If the monopolist is seeking maximum profits, it should:
A. retain its current price-quantity combination.
B. increase both price and quantity sold.
C. charge a lower price.
D. charge a higher price.
Answer: D
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Every economic decision involves a trade-off because of
A. theory. B. opportunism. C. consumption. D. scarcity. E. efficiency.
A price floor set above the equilibrium price
A) creates a surplus. B) creates a shortage. C) creates excess demand. D) balances supply and demand. E) has no effect.
Which of the following is not included in the U.S. balance of payments?
a. U.S. aid to Indonesian tsunami victims. b. U.S. corporate gifts to families who were harmed by hurricanes. c. Gifts from parents residing in foreign countries and paid to students studying at U.S. colleges and universities. d. All of the above are included in the balance of payments.
In general, the more the substitutes available for a good
A. the more inelastic the demand for the good. B. the more elastic the demand for the good. C. the greater the demand for the good. D. the less the demand for the good.