Which of the following is not a characteristic of a monopoly?
A. A monopolist faces a downward-sloping demand curve.
B. There are no close substitutes for a monopolist's product.
C. After the first unit, the monopolist's marginal revenue is always less than its price.
D. A monopolist is a price taker.
Answer: D
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The Criminal Records Corporation is operating at its minimum efficient scale, selling 10,000 records per month via late-night cable TV advertising. It currently buys pressed records from Hole-in-the-Middle, Inc, which has a minimum efficient scale of 100,000 records per month. Which of the following should Criminal Records do?
a. Continue to buy 10,000 records from Hole-in-the-Middle, which can make the records more cheaply. b. Buy 100,000 records from Hole-in-the-Middle, so that company can reach its minimum efficient scale too. c. Buy Hole-in-the-Middle and use its facilities to manufacture the 10,000 records it needs. d. Buy Hole-in-the-Middle and stop operating as Criminal Records because Hole-in-the-Middle is the more efficient business. e. Buy Hole-in-the-Middle and stop operating as Criminal Records because Hole-in-the-Middle is the larger business.
The Phillips curve represents a direct relationship between the inflation rate and the unemployment rate
a. True b. False Indicate whether the statement is true or false
For the past several decades, the percentage of national income in the United States allocated to human capital (employees and self-employed workers) has been approximately
a. 20 percent. b. 40 percent. c. 60 percent. d. 80 percent.
Answer the question on the basis of the following information. Assume that if the interest rate that businesses must pay to borrow funds were 20 percent, it would be unprofitable for businesses to invest in new machinery and equipment, so investment
would be zero. But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion. If the interest rate were 12 percent, $20 billion would be invested. Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate. Refer to the information. Which of the following is an accurate verbal statement of the described relationship? A. There is no regular or dependable relationship between business investment and the interest rate. B. The amount of business investment is unaffected by changes in the interest rate. C. Investment spending by businesses varies inversely with the interest rate. D. Investment spending by businesses varies directly with the interest rate.