Refer to the information provided in Figure 15.4 below to answer the question(s) that follow. 
Figure 15.4 Refer to Figure 15.4. Assume The Hand Made Shirt Shop has fixed costs of $150 and is a monopolistically competitive firm. If the firm produces the profit-maximizing level of output and sells it at the profit-maximizing price, the firm ________ of $100.
A. has a marginal cost
B. suffers a loss
C. has an average variable cost
D. earns a profit
Answer: B
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A natural monopoly market is characterized diseconomies of scale over the entire range of output.
Answer the following statement true (T) or false (F)
In August 1988, the Los Angeles Kings hired Wayne Gretzky for $15 million in cash. The hockey team’s decision must have been based on the expectation that
A. Gretzky’s opportunity cost will exceed $15 million. B. Gretzky’s marginal revenue product will equal or exceed $15 million. C. the team’s total revenue will equal $15 million. D. Gretzky’s marginal revenue product will rise in the long run.
The change in demand deposits varies directly with
A) the currency ratio. B) the reserve ratio on demand deposits. C) the monetary base. D) the reserve ratio on time deposits.
The change in total utility arising from a one-unit increase in consumption of a good is referred to as
a. average utility b. the principle of diminishing marginal utility c. real income d. marginal utility e. price