If a monopolist is producing at a point at which marginal revenue is greater than marginal cost, then it should:
a. continue producing at the current level.
b. raise its prices.
c. lower its prices.
d. increase the level of production.
e. decrease the level of production.
d
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Richard Baldwin's estimate was that the euro increased the trade level of its users by
A) only 5 percent. B) only 9 percent. C) over 30 percent. D) over 50 percent. E) only 12 percent.
In the aggregate production function, Y represents real GDP, K represents the capital stock, L represents the quantity of labor, and A represents an index of efficiency. Which of the following equations represents the aggregate production function?
A) Y = (K × L) / A B) Y × A = (K × L) C) Y = AF(K, L) D) Y = (K × L) = A /FY
As new firms enter a monopolistically competitive market, profits of existing firms
a. rise, and product diversity in the market increases. b. rise, and product diversity in the market decreases. c. decline, and product diversity in the market increases. d. decline, and product diversity in the market decreases.
Figure 4-13
The drug BGH (bovine growth hormone) dramatically increases the milk output of dairy cows. Farmers in Wisconsin, a big dairy state, vigorously oppose licensing the drug, fearing that excess supply and a consumer reaction on the purity of food issue will put many of them out of business. Which graph in Figure 4-13 best illustrates the farmers' fears?
a.
1
b.
2
c.
3
d.
4