In Figure 12.6, airline Fly Smart is initially a secure monopoly between two cities X and Y at point M, serving 300 passengers per day at the profit maximizing price of $300 per ticket. What is Fly Smart's profit per ticket?
A. $200
B. $120
C. $80
D. $0
Answer: A
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
The more complicated a task, the greater the ability to economize on ________ through specialization and centralized control
a. transaction costs b. marginal cost c. sunk cost d. fixed cost
If price exceeds marginal cost, we say that a firm receives
a. Extraction surplus b. User costs c. Consumer surplus d. Royalty payments e. Resource rents
The laissez-faire policy prescription to eliminate unemployment was to:
A. have government guarantee jobs for everyone. B. increase real wages so that people are encouraged to work. C. strengthen unions and government regulations protecting unions and workers. D. eliminate labor unions and government policies that hold real wages too high.