If a permanent drop in demand causes a monopolist to earn below-normal profits in the long run, this monopolist
a. will always exit the market in the long run
b. will be forced by the government to continue operating in the long run
c. may continue operating in order to avoid alienating its customers
d. will exit the market in the long run only if it cannot cover its fixed costs
e. will use limit pricing to reduce the size of its loss
A
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The production possibilities frontier separates ________
A) the goods and services that people want from those that they do not want B) the types of goods that can be attained from those that can't be attained C) the quantities of goods and services that can be produced from those that cannot be produced D) the combinations of goods that people value and those that they don't
Richard Baldwin's estimate was that the euro increased the trade level of its users by
A) only 5 percent. B) only 9 percent. C) over 30 percent. D) over 50 percent. E) only 12 percent.
If the supply of labor to a monopsonist is everywhere unit elastic, and the marginal expenditure equals $1, then the wage will equal
A) $0.50. B) $0.75. C) $1.00. D) $2.00.
Decisions to determine the government's budget are called:
A. fiscal policy. B. structural policy. C. trade policy. D. monetary policy.