Demand deposits are included in
A. M2.
B. M1.
C. neither M1 nor M2.
D. both M1 and M2.
Answer: D
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If the demand curve a monopolist faces is perfectly elastic, then the ratio of the firm's price to the marginal cost is
A) 0. B) 1. C) 2. D) None of the above—the answer cannot be determined.
"A monopolist can charge whatever price it wants." Do you agree or disagree? Why?
What will be an ideal response?
Which of the following will cause the demand curve for a good to shift to the left?
a. an increase in the price of the good b. a decrease in the price of the good c. a decrease in the price of a complementary good d. an expectation of a future price decline e. an increase in the price of a substitute good
The law of diminishing marginal utility states that
a. total utility falls as more of a good is consumed, other things constant b. total utility falls as marginal utility falls, other things constant c. marginal utility falls as total utility increases, other things constant d. marginal utility falls as more of a good is consumed, other things constant e. marginal utility falls as less of a good is consumed, other things constant