For a monopoly, when marginal revenue is zero:
A. profits are maximized.
B. total revenue is maximized.
C. marginal revenue is minimized.
D. marginal costs are minimized.
B. total revenue is maximized.
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If marginal benefit is greater than marginal cost, output is inefficiently high
Indicate whether the statement is true or false
A person covered by a generous insurance plan smokes more cigarettes than he does normally. This is an example of a: a. lemon problem
b. moral hazard. c. adverse selection. d. risk selection.
Suppose that the labor market for life guards is initially in equilibrium. Then the marginal productivity of life guards increases. What happens to the equilibrium wage and quantity of life guards?
a. Both the equilibrium wage and quantity increase. b. Both the equilibrium wage and quantity decrease. c. The equilibrium wage increases, and the equilibrium quantity decreases. d. The equilibrium wage decreases, and the equilibrium quantity increases.
Which of the following statements is NOT correct?
a) Trade allows for specialization b) Trade has the potential to benefit all nations c) Trade allows nations to consume outside of their production possibilities curves. d) Absolute advantage is the driving force of specialization.