When a monopolist's sales increase by one unit, it loses some marginal revenue and must sell every other unit at a lower price
a. True
b. False
Indicate whether the statement is true or false
True
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What differentiates a savings deposit from a small-denomination certificate of deposit (CD)?
A) A CD has a fixed maturity date; a savings deposit can be withdrawn at any time. B) A savings deposit cannot be withdrawn before its maturity date without incurring a penalty; funds in a CD are available at any time with no interest penalty. C) Only a savings deposit is a time deposit. D) All depository institutions accept savings deposits, whereas only a thrift institution can issue a CD.
Entry of new firms will occur in a monopolistically competitive industry until
a. marginal cost equals zero b. marginal revenue equals zero c. marginal revenue equals marginal cost d. economic profit equals zero e. economic profit is negative
Farm programs that guarantee a price higher than equilibrium
a. cause shortages b. decrease government spending c. decrease taxes d. raise farm property values e. increase suburban development
According to economic theory, under perfect competition, the price of a depletable resource
A. becomes an inaccurate signal of scarcity. B. may fall as firms will develop substitutes. C. will be too volatile to let markets adjust. D. will increase as firms develop new innovations to extract the resource.