Suppose that a monopolist calculates that at its present output level, marginal cost is $4.00 and marginal revenue is $5.00. The firm could increase profits by:
A. Decreasing price and increasing output
B. Increasing price and decreasing output
C. Decreasing price and leaving output unchanged
D. Decreasing output and leaving prices unchanged
A. Decreasing price and increasing output
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Natural Gas Boom Technological improvements in hydraulic fracturing, or "Fracking," have decreased the cost of extracting smaller pockets of natural gas. What affect does this have on supply and demand as well as on the equilibrium price and quantity?
Suppose that Norma is disappointed in the revenue her custom dress shop is bringing in. She is thinking of raising the price of each? dress, but she asks you for advice.
A. raise the price if demand is elastic. B. lower the price if the income elasticity of demand is positive. C. lower the price if the income elasticity of demand is negative. D. raise the price if demand is inelastic.
Which of the following might be considered an automatic fiscal stabilizer?
A. government budgeting for education B. unemployment compensation C. 401(k) retirement program D. government spending for the war effort
Using the definition of unemployment, which of the following individuals would be unemployed?
A) A full-time student quits school, enters the labor market for the first time, and searches for employment. B) Because of the increased level of automobile imports, an employee of General Motors is laid off but expects to be called back to work soon. C) Because of a reduction in the military budget, your next door neighbor loses her job in a plant where nuclear warheads are made and must look for a new job. D) All of these individuals are unemployed.