A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.
A. increase; increase
B. increase; decrease
C. decrease; decrease
D. decrease; increase
Answer: B
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An important feature of the DMP model is that
A) would-be workers care not just about the market wage, but about the chances of finding work. B) firms can fire workers. C) workers can choose to shirk on the job. D) firms maximize revenue.
A monopolist determines the profit-maximizing output
A) at the point at which TR = TC. B) at the point at which MR = MC. C) at any point it wants because it is the only producer of the product. D) at the point at which TR is maximum.
When marginal utility is __________, total utility is __________.
A. positive; increasing B. zero; maximized C. negative; decreasing D. All of the choices are correct.
For inferior goods
A. the substitution and income effects of a price increase will both decrease the quantity of the good demanded. B. the substitution and income effects of a price increase will both increase the quantity of the good demanded. C. the substitution effect of a price increase will decrease the quantity of the good demanded while the income effect of a price increase will increase the quantity of the good demanded. D. the substitution effect of a price increase will increase the quantity of the good demanded while the income effect of a price increase will decrease the quantity of the good demanded.