In the long run, all of the following are true for a monopolist EXCEPT
A) P > ATC.
B) P = MC.
C) MR = MC.
D) P > AVC.
Answer: B
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Suppose the economy's production function is Y = AK0.3N0.7. If K = 2000, N = 100, and A = 1, then Y = 246. If K rises by 10%, and A and N are unchanged, by how much does Y increase?
A) 30% B) 10% C) 6% D) 3%
Fundamentally, economics is concerned with:
a. how scarce resources are allocated to satisfy limited wants. b. how limited resources are allocated to satisfy scarce wants. c. how limited resources are allocated to satisfy unlimited wants. d. how limited wants can be used to satisfy limited resources.
If an investment will return $1,500 half of the time and $700 half of the time, the expected value of the investment is:
A. $1,250. B. $1,050. C. $2,200. D. $1,100.
If the economy in the graph shown is currently at point B, and the government enacts contractionary fiscal policy, in the short run the economy will most likely move to point:
A. A B. It is likely to be unaffected and stay at point B C. C D. D