To measure an economy's output adjusted for changes in the price level, one would use
A. Nominal GDP.
B. GDP per capita.
C. Real GDP.
D. Value added.
Answer: C
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Answer the following statement(s) true (T) or false (F)
1. The amount of output produced by two firms in a Cournot oligopoly setting is greater than that produced by a monopoly, but smaller than that which would be produced if the market were perfectly competitive. 2. According to the Bertrand model, price and output is higher under oligopoly than under competition. 3. A firm has monopoly power when it is the single seller of a good or service. 4. If a monopoly desires to raise its profits, it can simply raise the price it charges. 5. We know that the producer's surplus accruing to a simple monopoly firm must be greater than operating in a competitive market, else firms would not act as monopolists.
If it is possible to make a change that will help some people without harming others, then the situation is:
A. efficient. B. inefficient. C. unfair. D. fair.
In the short run, for a firm in monopolistic competition
A) the firm's economic profit must equal zero. B) marginal revenue exceeds marginal cost. C) price exceeds marginal cost. D) the firm is a price taker.
Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. Suppose the government imposes a $2.00 per gallon tax on milk. In the new general equilibrium:
A. the price of milk and the price of cereal are both higher. B. the price of milk is higher and the price of cereal is lower. C. the price of milk is lower and the price of cereal is higher. D. the price of milk and the price of cereal are both lower.