Exhibit 8-8 A firm's cost and marginal revenue curves
In Exhibit 8-8, product price in this market is fixed at $35. This firm is currently operating where MR = MC. Which of the following is true?
A. Price > AVC and this firm should shut down.
B. This firm is earning a profit of zero.
C. This firm could increase profits by increasing output.
D. Price > AVC and the firm should continue producing its current output.
Answer: D
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A monopolist hires fewer workers than a perfectly competitive industry, other things being equal, because
A) a monopolist has to pay higher wages in order to attract additional workers. B) the monopolist substitutes more capital for labor when compared to a competitive industry. C) the monopolist producer has to deal with unions and face higher wages than do competitive industries. D) the monopolist produces less output than a competitive industry.
For a monopolist to practice effective price discrimination, one necessary condition is:
a. identical price elasticity among groups of buyers. b. differences in the price elasticity of demand among groups of buyers. c. that the product is homogeneous market. d. none of these.
Which group has the highest poverty rate?
A. Non-Hispanic whites B. Blacks C. Hispanics
In all cases, normative economics deals with
A) what is. B) what should be. C) relatively small units in the economy. D) the entire economy.