Suppose a monopoly faces an inverse demand curve of P = 300 ? 10Q and has constant marginal cost of 20. If the government is considering legislation that would regulate price to the competitive level, what is the maximum amount the monopoly would spend on (legal) lobbying activities designed to thwart the regulation?
A. $280
B. $2,240
C. $1,960
D. None of the statements is correct.
Answer: C
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Legislators in a democracy are more likely to support special interests than the broad interests of citizens generally because
A) incumbents have such powerful advantages in election campaigns. B) money plays such a large role in political campaigns. C) they cannot know what the public interest requires in the absence of market information. D) they do not have to fear being voted out of office. E) they pay attention to the people paying attention to them.
Borrowing from abroad represents:
A) a capital outflow. B) a capital inflow. C) positive net savings. D) none of the above.
A vertical supply curve may be described as being
A) relatively elastic. B) perfectly inelastic. C) relatively inelastic. D) perfectly elastic.
In a relationship among total, average and marginal products, where TP is maximized:
a. AP is maximized b. AP is equal to zero c. MP is maximized d. MP is equal to zero e. none of the above