Which of the following would be the most likely outcome if all perfectly competitive firms in a product market join together to form a monopoly?
A) Both the rate of output and the quantity of labor input employed will decrease.
B) Both the rate of output and the quantity of labor input employed will increase.
C) The rate of output in the market will increase but the quantity of labor input will decrease.
D) The rate of output in the market will decrease but the quantity of labor input will increase.
Answer: A
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When a corporation announces a major decline in earnings, the stock price may initially decline significantly and then rise back to normal levels over the next few weeks. This impact is called
A) the January effect. B) mean reversion. C) market overreaction. D) the small-firm effect.
Marginal utility is defined as:
A. the extra satisfaction the consumer receives from an extra $1 of income. B. the total level of satisfaction a consumer receives upon the consumption of a certain number of goods. C. the number of hours a consumer would be willing to work to receive a certain product. D. the extra satisfaction a person derives from consuming an additional unit of a good.
Suppose a monopolist's costs and revenues are as follows: ATC = $50; MC = $45; MR = $35; P = $55. The firm should
A) increase output and decrease price. B) decrease output and increase price. C) not change output or price. D) shut down.
If consumers attempt to buy more goods than the economy can produce, the result is
A. Unemployment. B. The wealth effect. C. Demand-pull inflation. D. Cost-push inflation.