Other things being equal, the monopolist will
A. have lower profits than if the industry were perfectly competitive.
B. hire more workers than if the industry were perfectly competitive.
C. hire the same number of workers as a perfectly competitive industry would.
D. hire fewer workers than if the industry were perfectly competitive.
Answer: D
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When a law freezes residential rents at their existing level for as long as the vacancy rate remains below some target level,
A) owners will be encouraged to supply additional rental units. B) rents will be frozen indefinitely, or at least until the law is changed. C) affordable housing to low-income people will be guaranteed. D) the vacancy rate will rise.
Considerable day-to-day volatility in major exchange rates is caused by
A) shifts in tastes or preferences for domestic versus foreign goods. B) international capital mobility and expectations of future exchange rates. C) sudden changes in productivity in one nation versus others. D) highly variable inflation rates in some industrialized countries.
Suppose Sandy is moving to Washington, D.C. for a year-long job working for the government. She has decided to rent one of two apartments. Both apartments cost $1,000 per month and are identical except for the fact that one is a monthly rental and the other has a year-long lease. Which of the following best explains why Sandy might pick the year-long lease?
A. There is no good reason for Sandy to pick the year-long lease because the monthly rental allows her more flexibility. B. Sandy might worry that if she picks the monthly rental, she will get kicked out if the landlord finds someone willing to pay more than $1,000 per month. C. Sandy might worry that if she picks the monthly rental, she will have to move if she finds another apartment for less than $1,000 per month. D. There is no good reason for Sandy to pick the year-long lease because the two apartments are identical.
Consider a Cournot oligopoly consisting of five identical firms producing good X. If the firms produce good X at a marginal cost of $7 per unit and the market elasticity of demand is ?3, determine the profit-maximizing price.
A. $7 per unit B. $5.25 per unit C. $4.20 per unit D. $7.50 per unit