For a monopolist to maximize profits, its
A. price equals marginal revenue.
B. marginal revenue exceeds price.
C. price equals average total cost.
D. price exceeds marginal cost.
Answer: D
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The economy is at full employment. If aggregate demand increases,
A) an inflationary gap is created and the AS curve shifts leftward as the money wage rate rises. B) an inflationary gap is created and the AD curve shifts leftward. C) an inflationary gap is created and potential GDP increases to close the ga
If the fraction of U.S. government securities held by foreigners increases, _____
a. current consumption by U.S. citizens can decrease b. current consumption by U.S. citizens can increase c. current interest payments will increase d. private investments will increase e. the burden of debt on future generations will decrease
Cable television is regulated because of its monopolistic cost structure. Baseball and basketball games, which also have monopolistic cost structures, are unregulated. What do these activities (watching TV and going to the ball park or stadium) not have in common?
a. being a leisure activity b. being a luxury c. entertainment value d. large-scale public consumption e. industry trade groups
Suppose the government of New Country has fixed the value of its currency, the New Peso, at $1 per New Peso, but the market equilibrium value of the New Peso is $0.50 per New Peso. In order to maintain the official value of the New Peso the Central Bank of New Country must either ________ domestic interest rates, or ________the supply of international reserves by purchasing New Pesos
A. lower; decrease B. raise; decrease C. raise; increase D. lower; increase