For a firm facing a downward sloping demand curve, marginal revenue
A) is at a minimum at the midpoint of the demand curve.
B) is greater at higher prices than at lower prices.
C) increases each time prices are lowered.
D) falls each time prices are raised.
B
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Sammy has a drone that he values at $1,500. Dean values the same drone at $2,000. Sammy decides to sell the drone to Dean for $1,800. If the government imposes a $350 tax on the sale of drones,
A) Sammy and Dean would not be able to complete the transaction. B) Sammy and Dean would still be able to complete the transaction. C) the tax would cause a deadweight loss of $500. D) Both A and C are correct.
In 1997 the Federal Trade Commission was granted a preliminary injunction on a proposed merger between Staples and Office Depot
The FTC was able to convince the federal district court that allowing the merger would create the potential for anticompetitive prices since it would give the newly merged company a 75% market share and would only leave Office Max as the remaining office supply superstore. Critically evaluate the FTC's use of "office supply superstores" as the relevant market.
Suppose that nominal GDP were $1200 billion in 1990 and $2000 billion in 1995. The implicit GDP deflator was 1.00 in 1990 and 1.50 in 1995. From this we can infer that, between 1990 and 1995
A) nominal GDP rose by 33%. B) prices rose by 66%. C) real GDP remained constant. D) real GDP rose by about 11%.
Suppose the Chinese central bank wants to keep the exchange rate of its currency value constant over time. An increase in the demand for Chinese goods by American residents will lead the Chinese central bank to
A) coordinate with the U.S. central bank in order to increase the supply of the U.S. dollar in the foreign exchange market. B) increase the demand for the Chinese currency in the foreign exchange market. C) use its dollar reserves to buy the Chinese currency in the foreign exchange market. D) sell the Chinese currency in exchange for U.S. dollars in the foreign exchange market.