Use the following graph for a pure monopoly operating in the short-run to answer the next question.
To maximize profits, this firm should charge a price of ________.
A. 0B
B. 0C
C. 0A
D. not labeled on the graph
Answer: A
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Options are contracts that give the purchasers the
A) option to buy or sell an underlying asset. B) obligation to buy or sell an underlying asset. C) right to hold an underlying asset. D) right to switch payment streams.
Monetarists maintain that
a. the best way to study the economy is with the expenditure schedule. b. control over the money supply implies control over real GDP. c. velocity is not constant, but is fairly predictable. d. All of the above are correct.
As shown in Exhibit 3, what is the total welfare from imports experienced by consumers and producers after free trade is allowed?
a. d
b. b + d
c. a + b + d
d. a + b + c + d