A monopolist’s demand curve implies that
A. the monopolist is a price taker.
B. the monopolist is a price maker.
C. it has nothing to do with the amount a monopolist can sell.
D. it can be downward sloping or horizontal depending on the price.
Answer: B
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The cost of producing cigarettes in the United States has increased and at the same time, more and more Americans are choosing to not smoke cigarettes. Which of the following best explains the effect of these events in the cigarette market?
A) Both the supply and demand curves have shifted to the left. As a result, there has been a decrease in the equilibrium quantity and an uncertain effect on the equilibrium price. B) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. C) The supply curve has shifted to the right and the demand curve has shifted to the left. As a result there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. D) The supply curve has shifted to the right and the demand curve has shifted to the left. As a result, there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity.
According to the IGM poll, most economists think that the crowding out effects were stronger than the stimulative effects of ARRA
a. True b. False Indicate whether the statement is true or false
If income rises in the market for an inferior good, will the demand curve for the inferior good shift to the right or to the left?
Suppose that Spain has a comparative advantage in hats and Portugal has a comparative advantage in doormats. Under a system of free trade, each country specializes and then trades with the other. If the price starts at four hats per doormat, and then increases to five hats per doormat, then:
A. people in Portugal will not want to buy as many hats. B. Spain no longer has a comparative advantage in hats. C. some of the gains from trade shift to Spain. D. some of the gains from trade shift to Portugal.