Suppose a monopolist is producing a level of output such that MR > MC. What should the firm do to maximize its profits?
A) The firm should do nothing — it wants to maximize the difference between MR and MC in order to maximize its profits.
B) The firm should hire less labor.
C) The firm should increase price.
D) The firm should increase output.
D
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Suppose when you are 21 years old, you deposit $1,000 into a bank account that pays annual compound interest, and you do not withdraw from the account until your retirement at the age of 65, 44 years later. How much more will be in your account if the interest rate is 6 percent rather than 4 percent?
A. $880 B. $5,617 C. $2,390 D. $7,369
Explain the difference between macroeconomics and microeconomics. Give examples of each.
What will be an ideal response?
The pursuit through government of a "transfer of wealth" at someone else's expense refers to:
A. logrolling. B. rent-seeking behavior. C. the paradox of voting. D. the median-voter model.
Which of the following statements is correct with respect to price elasticity of supply?
A. The price elasticity of supply tends to be greater as new firms can easily enter the market. B. The price elasticity of supply tends to be greater as expanding existing production facilities is less costly. C. The price elasticity of supply tends to be smaller as firms have limited production facilities. D. All of these are correct.