Refer to the diagram for a pure monopolist. Monopoly profit:
A. cannot be determined from the information given.
B. will be ae per unit sold.
C. will be bc per unit sold.
D. will be ac per unit sold.
A. cannot be determined from the information given.
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A normal production possibilities frontier has a
A. positive slope and is steeper near the horizontal axis than near the vertical axis. B. negative slope and is steeper near the horizontal axis than near the vertical axis. C. positive slope and is steeper near the vertical axis than near the horizontal axis. D. negative slope and is steeper near the vertical axis than near the horizontal axis. E. zero slope, and it does not touch the horizontal axis.
Which of the following factors will NOT cause a shift in the demand for a good?
A) A change in consumer incomes B) A change in the market price of the good C) A change in the number of consumers D) A change in tastes and preferences
Classical economist David Hume observed that as the money supply expanded after gold discoveries it took some time for prices to rise and in the meantime the economy enjoyed higher employment and production. This is inconsistent with monetary neutrality because
a. monetary neutrality would mean that neither prices nor production should have risen. b. monetary neutrality would mean that production should have risen, but prices should not have. c. monetary neutrality would mean the prices should have risen, but production should not have changed. d. monetary neutrality would mean that prices and production should both have fallen.
Which of the following is an advantage of carrying out economic transactions through firms?
A. The number of transactions carried out by a firm is more than that carried out in a market, thereby reducing the contracting cost. B. The number of transactions carried out by a firm is fewer than that carried out in a market, thereby reducing the contracting cost. C. Transactions made by or with a firm involve no opportunity cost. D. Firms lack knowledge about the products they produce and distribute in a market.