If a profit-maximizing monopolist finds that marginal cost is increasing and exceeds marginal revenue, it should:
a. increase output and decrease price.
b. increase price and decrease output.
c. decrease both price and output
d. increase both price and output.
b
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Which requirement for perfect competition rules out trade associations or other collusive arrangements in which firms work together to influence price?
A. Freedom of entry and exit B. Homogeneity of product C. Perfect information D. Numerous small firms and customers
Assume that a firm's interest-rate cost-of-funds curve for R&D is perfectly elastic. Which of the following would decrease a firm's optimal R&D expenditures and, in equilibrium, increase the expected rate of return on the last dollar of R&D?
A. A rightward shift of the expected-rate-of-return curve. B. An upward shift of the interest-rate cost-of-funds curve. C. A leftward shift of the expected-rate-of-return curve. D. A downward shift of the interest-rate cost-of-funds curve.
When the Fed decreases the money stock, the money supply curve shifts to the ________ and the interest rate ________, everything else held constant
A) right; rises B) right; falls C) left; falls D) left; rises
Which of the following is consistent with the idea that high money supply growth leads to high inflation?
a. the quantity theory and evidence from four hyperinflations during the 1920's
b. the quantity theory but not evidence from four hyperinflations during the 1920's
c. evidence from four hyperinflations during the 1920's but not the quantity theory
d. neither the quantity theory nor evidence from four hyperinflation during the 1920's