Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of computers in the country of Oz. If the marginal cost of producing computers is $1,000 no matter how many are produced and the monopolist seeks to maximize profit, it should set the price of computers at:Price of computers($)Quantity demanded per year5,0001004,0002003,0003002,0004001,000500
A. $2,000.
B. $4,000.
C. $3,000.
D. $1,000.
Answer: C
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The wage rate and MLC differ for a monopsonist because
a. the monopsonist is forced to pay a wage rate greater than the worker's MLC b. the monopsonist must accept the labor market's wage rate c. workers are not as efficient when employed by a monopsonist d. any wage rate increase applies to all workers, not just to the last hired e. a wage rate decrease forces workers to work longer hours
The invisible hand's ability to coordinate the decisions of the firms and households in the economy can be hindered by
a. government actions that distort prices. b. increased competition in markets. c. enforcement of property rights. d. too much attention paid to efficiency.
The more rapidly the government creates money to finance its budget deficits, the:
A. smaller the inflation tax and the greater the reduction in the real value of any assets specified in nominal terms. B. smaller the inflation tax and the smaller the reduction in the real value of any assets specified in nominal terms. C. greater the inflation tax and the smaller the reduction in the real value of any assets specified in nominal terms. D. greater the inflation tax and the greater the reduction in the real value of any assets specified in nominal terms.
An increase in the price of product A will:
A. increase the marginal utility per dollar spent on A. B. decrease the marginal utility per dollar spent on A. C. not affect the marginal utility per dollar spent on A. D. cause utility-maximizing consumers to buy more of A.