The price-output combination that maximizes profits for a monopolist occurs at the point where
A. total revenues and total costs are equal.
B. total revenues are the greatest.
C. the difference between total revenues and total costs is the greatest.
D. the elasticity of demand equals one.
Answer: C
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Which of the following variables is fixed in the aggregate expenditure model?
A) output B) real GDP C) consumption D) investment E) price level
Corporate profits are taxed twice because
A) taxes are collected on profits before profits are distributed to shareholders. B) the government wants to minimize the amount of tax paid on capital gains. C) it is economically efficient to reduce the amount of retained earnings. D) capital gains are not indexed to the rate of inflation.
A monopolist will maximize profits by:
a. setting his price as high as possible. b. setting his price at the level that will maximize per-unit profit. c. producing the output where marginal revenue equals marginal cost. d. producing the output where price equals marginal cost.
The prevalent welfare policy is to
A. provide vocational training for welfare recipients, so that they can be self-supporting. B. provide government and private sector employment for those leaving the welfare rolls. C. to basically force welfare recipients to leave the welfare rolls. D. to allow welfare recipients to continue receiving benefits as long as there are children under six years of age in the family.