At the profit-maximizing level of output for a monopolist:
A. Price is greater than marginal cost
B. Price is greater than average revenue
C. Average total cost equals marginal cost
D. Total revenue is greater than total cost
A. Price is greater than marginal cost
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Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What are Winston's economic profits?
A. $78,000 B. $142,000 C. $138,000 D. $150,000
A country reports a potential GDP of $6 trillion, a natural unemployment rate of 4 percent and an expected inflation rate of 2 percent. Using Okun's Law, if the unemployment rate is 5 percent, what is real GDP?
What will be an ideal response?
In most less developed countries, the initial target of import substitution is to promote domestic production of
(a) consumer goods. (b) food and other agricultural goods. (c) capital goods. (d) manufactured intermediate goods.
If the legal and regulatory environment fails to protect property rights and is often used to favor some at the expense of others, which of the following is most likely to be encouraged?
a. productive activities b. a high rate of investment c. rent-seeking and unproductive activities d. competitive markets