Exhibit 8-2 Demand and cost information for a monopoly
Q
P
TC
0
40
10
1
30
15
2
20
25
3
10
40
4
0
60
The marginal revenue of the second unit of output in Exhibit 8-2 is:
A. 10.
B. 20.
C. 30.
D. 40.
Answer: A
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Answer the following statement true (T) or false (F)
In long-run equilibrium, which of the following is not equal to price for a perfectly competitive firm?
a. Short-run average variable cost. b. Long-run average total cost. c. Short-run marginal cost. d. Short-run average total cost.
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a. a lower price level, increasing citizen's real wealth b. a lower price level, reducing interest rates c. a lower price level, increasing exports and decreasing imports d. None of the above decrease U.S. aggregate demand.
Why didn't the huge increase in the money supply that resulted from quantitative easing lead to increases in inflation?
A. Because quantitative easing targets nominal GDP growth rates, not inflation rates. B. Because the federal government offset the inflationary pressure by drastically decreasing spending and raising taxes. C. Because quantitative easing increased the monetary base, but not broader definitions of money like M1 and M2. D. Because huge increases in the money supply generally lead to deflation, not inflation.