A monopolist
A) can charge whatever price it wants because it is the only firm producing the good.
B) can usually keep price equal to marginal revenue by lowering the price on the last unit sold only.
C) faces a demand curve that is more elastic than the demand curve for the industry.
D) is constrained in its pricing decisions by the demand curve it faces.
Answer: D
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
What might happen to the equilibrium price and quantity of Disney World tickets if Universal Studios offers discounts to families?
A. Price of Disney World tickets decreases, and quantity bought decreases B. Price of Disney World tickets increases, and quantity bought decreases C. Price of Disney World tickets decreases, and quantity bought increases D. Price of Disney World tickets increases, and quantity bought increases
Refer to the above figure. An increase in aggregate demand between real Gross Domestic Product (GDP) levels Y0 and Y1
A) would not increase output since the economy is already working at full capacity. B) would have no effect on the price level. C) would cause price levels to fall. D) would most likely result in some inflation.
Industries that seek trade protection from government can be said to be engaging in rent seeking behavior
a. True b. False