A monopolist will operate at the quantity where:
a. MR = MC and charge a price equal to marginal revenue
b. MR = MC and charge a price equal to average variable cost.
c. MR = MC and charge a price corresponding to demand at that level.
d. MR = MC and charge a price corresponding to average total cost at that level.
c
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Assume that the full-employment level of output is $1,000 and the price level associated with full-employment output is 100. Also assume that the economy's current level of output is $1,100 and, at the price level of 100, current aggregate demand is $1,200. If the government wants to move the economy back to the full-employment level of output and the MPC is 0.75, then it should
A. reduce government purchases by $100. B. reduce government purchases by $200. C. reduce government purchases by $50. D. reduce government purchases by $25.
Supply shocks after 1985
A) forced the Fed to follow restrictive monetary policy and caused a negative output ratio. B) forced the Fed to follow restrictive monetary policy and caused a positive output ratio. C) allowed the Fed to follow accommodative monetary policy and caused a negative output ratio. D) allowed the Fed to follow accommodative monetary policy and push the output ratio toward zero.
When a tax is imposed on buyers, consumer surplus decreases but producer surplus increases
a. True b. False Indicate whether the statement is true or false
If a sizable number of workers were switched from full-time to half-time employment, then the official unemployment rate would:
A. rise. B. fall. C. remain unchanged. D. react unpredictably.