If a monopolist is producing the quantity at which price equals marginal cost, it should
A. reduce price and keep output unchanged if it wants to maximize profits.
B. reduce output if it wants to maximize profits.
C. increase output if it wants to maximize profits.
D. continue to produce this amount if it wants to maximize profits.
Answer: B
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An increase in the expected rate of inflation will ________ the expected return on bonds relative to the that on ________ assets, everything else held constant
A) reduce; financial B) reduce; real C) raise; financial D) raise; real
In an economy in which decisions are guided by prices and individual self-interest, there is
a. the potential to achieve efficiency in production. b. a strong need for government intervention in the market. c. less efficiency than would be observed in a centrally-planned economy. d. more need for a strong legal system to control individual greed than would be needed in a centrally-planned economy.
The change in the contribution of capital formation was the chief cause of the productivity slowdown in 1973–1995.
Answer the following statement true (T) or false (F)
If the price of a good increases by 5% and the quantity demanded decreases by 5%, then at that price, the good is
A. perfectly inelastic. B. unit elastic. C. elastic. D. inelastic.