Suppose that a pure monopoly calculates that at its present output level, marginal revenue is $1 and marginal cost is $2. The monopoly could maximize profits or minimize losses by ________.
A. increasing price and decreasing output
B. increasing price and increasing output
C. leaving price unchanged and decreasing output
D. decreasing price and leaving output unchanged
Answer: A
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Unlike perfectly competitive firms, monopolists produce where marginal revenue intersects marginal cost.
Answer the following statement true (T) or false (F)
People are most likely to make their opinions on a potential piece of legislation known to their representatives when
A) the legislation matters greatly to them, whether or not it affects their private interests. B) the legislation will affect their private interests substantially. C) they believe their actions will make enough difference to justify the effort. D) they can do so at low cost to themselves.
If the number of unemployed workers is 200 million, and the number in the labor force is 500 million, what is the unemployment rate?
A) 0.4% B) 4% C) 14% D) 40%