The price-output combination that maximizes profits for a monopolist occurs at the point where
A) total revenues and total costs are equal.
B) the difference between total revenues and total costs is the greatest.
C) total revenues are the greatest.
D) the elasticity of demand equals one.
Answer: B
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It is a "given" that an individual firm selling in a perfectly competitive market will take the market price because
A. there are no good substitutes for the firm's product. B. product differentiation is reinforced by extensive advertising. C. the firm's demand curve is downward-sloping. D. each producer supplies a negligible fraction of total market.
A diagram that shows the maximum amount of one type of good that can be produced in an economy, given the production of the other is known as
A) an indifference curve. B) the tradeoff schedule. C) the production possibility frontier. D) the balance of trade.
The Bretton Woods system worked fairly well for a number of years, but it finally broke down over
a. lack of agreement on how to settle the problems of the surplus nations. b. its inability to devalue the U.S. dollar. c. the huge debts of the IMF to less-developed countries. d. the controversies generated by surplus nations wanting to devalue their currencies.
A consumer is willing and able to buy 100 units of a good at $100, but the consumer's quantity demanded falls to zero if the price rises even a fraction of a cent. The consumer's demand curve is
A. vertical and is perfectly elastic. B. horizontal and is perfectly elastic. C. horizontal and is perfectly inelastic. D. downward sloping from higher prices down to $10 and then horizontal.