Figure 7.2 shows a monopolist's demand curve. Suppose that the marginal cost is $6 for all units and the current output level is 4 units. Then which of the following is true?
A. The marginal revenue is less than the marginal cost.
B. The price is greater than the average total cost.
C. The firm is producing the profit-maximizing level of output.
D. All of these are correct.
Answer: A
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In the long run, the level of output depends on the price level
Indicate whether the statement is true or false
Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. What is dominant strategy for Bob?
A) Confess. B) Don't confess. C) Flip a coin to decide what to do. D) There is no dominant strategy.
Which of the following was the result on appeal in Webster v. Blue Ship Tea Room, Inc., the case in the textbook in which the plaintiff sued after getting a bone caught in her throat while eating New England seafood chowder?
a. The plaintiff could recover based on an express warranty. b. The plaintiff could not recover, because she waited too long to sue and because she was not the immediate purchaser of the fish. b. The plaintiff could recover based upon the implied warranty of merchantability. c. The plaintiff could not recover, because she should have anticipated that fish bones might remain in New England seafood chowder. d. The plaintiff could recover based upon the implied warranty of fitness for a particular purpose.
"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?
A. benefits-received B. inexpensive-to-collect C. ability-to-pay D. fairness of contribution