Answer the following statement(s) true (T) or false (F)
1. A simple profit-maximizing monopoly will choose its price and quantity from the elastic portion of its demand curve.
2. Unlike perfectly competitive firms, monopolies do not produce where marginal revenue equals marginal cost, thus leading to deadweight loss.
3. In practice, many monopolists are required to earn zero economic profit.
4. If a natural monopoly charged the competitive price, it would earn a negative profit.
5. A competitive industry is a viable alternative to a natural monopoly.
1. True
2. False
3. True
4. True
5. True
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When perfect price discrimination comes in the form of a two-part tariff, one part of the "tariff" just covers marginal costs.
Answer the following statement true (T) or false (F)
Contractionary monetary policy and expansionary fiscal policy both reduce net exports in an open economy
Indicate whether the statement is true or false
Sally lost her job when her company went out of business because of a recession. This is an example of:
a. frictional unemployment. b. structural unemployment. c. cyclical unemployment. d. technological unemployment.
A tax imposed on imported goods is
A. A tariff. B. An embargo. C. An example of fiscal policy. D. A quota.