Price cap regulation involves
A) setting the monopoly's price equal to its average total cost.
B) setting the monopoly's price equal to its profit-maximizing price.
C) setting a maximum price the monopoly may charge.
D) assuming a natural monopoly will not charge a higher than profit-maximizing price.
E) setting the monopoly's price equal to its marginal cost.
C
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
During the recessions of the early 1980s and of 2007–2009, the unemployment rate in the United States: a. increased significantly
b. decreased to almost zero. c. became negative. d. remained constant.
If a profit-maximizing firm finds that, at its current level of production, MR > MC, it will
A) earn greater profits than if MR = MC. B) increase output. C) decrease output. D) shut down.
Refer to the information provided in Figure 28.3 below to answer the question(s) that follow.
Figure 28.3Refer to Figure 28.3. A minimum wage of $8
A. will lead to an excess demand for labor of 20. B. will lead to an excess demand for labor of 40. C. will lead to an excess demand for labor of 60. D. will have no effect because the minimum wage is set below the equilibrium wage and for a minimum wage to have any effect on the labor market it must be above the equilibrium wage.