A pure monopoly can sell 20 toys per day for $8 each. To sell 21 toys per day, the price must be cut to $7. The marginal revenue of the 21st toy is
A. -$13.
B. +$21.
C. +$7.
D. -$10.
Answer: A
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The size of the underground economy would tend to decrease if the government of a country
A) increased income tax rates. B) increased business taxes. C) decreased government regulations on businesses. D) made over-the-counter drugs illegal.
If the Federal Reserve wants to lower the federal funds rate, it should
A) increase reserve requirements. B) announce a lower rate. C) request a lower rate. D) purchase government securities.
Given the desire of politicians to get reelected, they might try in the short run to use _____
a. a contractionary monetary policy b. an expansionary fiscal policy c. an expansionary monetary policy d. tax increases e. automatic stabilizers to control demand
The Japanese demand curve for dollars is downward-sloping because a:
a. higher number of yen per dollar means U.S. goods are cheaper in Japan. b. lower number of yen per dollar means U.S. goods are cheaper in Japan. c. lower number of yen per dollar means U.S. goods are more expensive in Japan. d. lower number of yen per dollar means U.S. goods are less expensive in the U.S.