Which of the following statements is true?
a. Monopoly results in smaller output and a higher price than would be the case under perfect competition.
b. The monopolist produces at an output where P > MC and the marginal value to society of the last unit produced is greater than its marginal cost.
c. The monopoly is not producing enough output from society's standpoint.
d. Monopoly may lead to greater concentration of economic power and could retard innovation.
e. All of these statements are true.
Ans: e. All of these statements are true.
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Use the following graph to answer the next question.
If demand for overnight funds in the graph should increase by $50 billion at each and every point on the demand curve, but the Federal Reserve wants to keep the target rate at 5.0%, what will be the new equilibrium quantity of reserves?
A. $200 billion B. $100 billion C. $150 billion D. $250 billion
A single-price monopoly will set its price according to which of the following rules?
A) P = MR and MR = MC B) P = MC where the MC curve crosses the demand curve C) P = MR where the MR curve crosses the demand curve D) None of the above answers is correct.
The t-statistic has the following distribution:
A) standard normal distribution for n < 15 B) Student t distribution with n–1 degrees of freedom regardless of the distribution of the Y. C) Student t distribution with n–1 degrees of freedom if the Y is normally distributed. D) a standard normal distribution if the sample standard deviation goes to zero.
An accounting identity is
A) when the balance of payments is running a surplus or deficits. B) when the balance of trade is in surplus or deficit. C) an expression of values that are equivalent by definition. D) special drawing rights.