Which statement is true?
A. The monopolist produces at an output level that is less than peak efficiency.
B. The monopolist can sell more output only by raising price.
C. The monopolist's demand and marginal revenue curves are identical.
D. Price is read off the marginal revenue curve.
A. The monopolist produces at an output level that is less than peak efficiency.
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The law of diminishing product states that if increasing quantities of a variable factor are applied to a given quantity of fixed factors, then:
a) the MP and the AP of the variable factor will eventually decrease. b) TP will eventually begin to fall. c) the AP will eventually decrease, but only if TP is held constant. d) the MP will eventually decrease with constant AP. e) the AP will eventually decrease with constant MP.
Public choice economists believe that if governments support special interest groups, they ______.
a. create chances for people to benefit through economic cooperation b. provide more opportunities for everyone c. make it look like people benefit most at the expense of everyone else d. create a false image that sharing resources can be beneficial to the economy
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
According to the theory of rational expectations, the economy always remains at the natural rate of unemployment, irrespective of policy changes
a. True b. False Indicate whether the statement is true or false