Allocative inefficiency due to unregulated monopoly is characterized by the condition:
A. P = MR.
B. P > MC.
C. P > AVC.
D. P = MC.
Answer: B
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In part, an antitrust laws
A) provide for strict product liability. B) prohibit charging prices that customers think are too high. C) require firms with profits to pay dividends. D) prohibit monopolistic practices.
When the real wage rate changes, firms change the __________ and the level of production.
A. wage rate of employees B. quality of goods or services produced C. quantity of labor employed D. production plans
Marginal revenue
A. cannot be used to determine the profit-maximizing rate of production. B. is a change in revenue that is immeasurable and non-quantifiable. C. cannot be effectively utilized when analyzing the perfect competitor. D. is the change in total revenues resulting from a change in output.
Suppose a small economy produces only HD TV sets. In year 1, 100,000 sets are produce and sold at a price of $1,200 each. In year 2, 100,000 sets are produced and sold at a price of $1,000 each. As a result:
A. Nominal GDP stays constant, while real GDP decreases B. Nominal GDP decreases, while real GDP stays constant C. Nominal GDP and real GDP both decrease D. Nominal GDP decreases, and real GDP decreases even more