How does a firm measure its profit?
What will be an ideal response?
Profit is measured as the difference between total revenue and total cost.
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Refer to the figure above. What is the deadweight loss when the market is converted into a monopoly?
A) $0 B) $45 C) $90 D) $180
Suppose Exxon-Mobil announces that its profits in the third quarter of 2013 were $40 billion. This will cause the price of Exxon-Mobil stock to
A) rise. B) fall. C) remain unchanged. D) rise, fall, or remain unchanged depending on the expectations of market participants before the announcement.
Which of these is an example of a negative network externality?
A) Bandwagon effect B) Pollution C) Snob effect D) Two-part tariff
A purchase of U.S. government securities by the Fed causes
A) an expansion of the money supply equal to the amount of the securities purchased. B) a contraction of the money supply equal to the amount of the securities purchased. C) an expansion of the money supply of more than the amount of the securities purchased. D) a contraction of the money supply of more than the amount of the securities purchased.