A monopolist is producing at an output level at which ATC = $5, P = $6, MC = $4, and MR = $3. We can conclude that
A) economic profit could be increased by producing more.
B) economic profit could be increased by producing less.
C) economic profit cannot be increased.
D) the firm is earning $10 in economic profits.
Answer: B
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If the Slamdunkers can sell 5000 season tickets for $100 and 6000 season tickets only by lowering the price to $80, the demand for season tickets between the two prices is
A) elastic. B) inelastic. C) marginal. D) unit elastic.
Many drugs are illegal in the United States. Despite this law, illegal drugs are usually available at a price many times higher than they would be if the drugs weren't illegal. The high price of illegal drugs is an example of:
A. the market affecting political forces. B. the failure of the market. C. the failure of political forces. D. political forces affecting the market.
The observation that after some point, successive equal size increases in a variable factor of production, such as labor, added to fixed factors of production, will result in smaller increases in output is the
A) law of diminishing marginal product. B) streamlining production function. C) consumer equilibrium. D) theory of increasing marginal utility.
Transfer payments are:
A. excluded when calculating GDP because they only reflect inflation. B. excluded when calculating GDP because they do not reflect current production. C. included when calculating GDP because they are a category of investment spending. D. included when calculating GDP because they increase the spending of recipients.