Irving R. Associates is granted a patent for a new product for which there are no close substitutes. Which of the following must be true at the profit-maximizing quantity?
a. Price is equal to marginal cost.
b. Average revenue is equal to marginal cost.
c. Marginal revenue is positive.
d. Marginal revenue is less than marginal cost.
e. Price is greater than average revenue.
C
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A country specializes in the production of goods for which it has a comparative advantage, so
A) some producers and consumers win, some lose, but overall the gains exceed the losses. B) all producers win. C) all consumers win. D) producers win, consumers lose, but overall the gains exceed the losses.
A profit maximizing single-price monopolist charges a price equal to
A) average total cost. B) marginal revenue. C) the highest price consumers are willing to pay for the profit maximizing quantity. D) the price necessary for the firm to earn a normal return on its investment.
A monopolist determines the profit-maximizing output
A) at the point at which TR = TC. B) at the point at which MR = MC. C) at any point it wants because it is the only producer of the product. D) at the point at which TR is maximum.
A potential drawback to the big-push strategy in LDCs is that
a. supply bottlenecks may occur that would undermine the all-at-once development process b. there is a problem in choosing which sectors to develop first c. private firms will avoid making the planned investment d. it calls for vast movements of resources, including labor, which may not be possible because people are disinclined to move e. it depends primarily on foreign aid which has proved to be an unreliable source of investment funding