Suppose a perfectly competitive market results in a long-run equilibrium price of $8 and quantity of 500. If this same market were a monopoly, which of the following price and quantity combinations would be the most likely?
A. Price: $10, Quantity: 350
B. Price: $8, Quantity: 500
C. Price: $6, Quantity: 650
D. Price will equal marginal revenue and quantity will be found where marginal revenue equals marginal cost.
Answer: A
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For luxuries, income elasticity is:
A. less than 0. B. greater than 0. C. equal to 1. D. greater than 1.
The idea that the desires of resource suppliers and firms to further their own self-interest will automatically further the public interest is known as:
A. Consumer sovereignty B. The invisible hand C. Derived demand D. Creative destruction
Which of the following has NOT changed much as a percent of GDP over the last twenty years for the United States?
i. the official settlements account ii. the capital and financial account iii. the current account A) ii only B) ii and iii C) iii only D) i only E) None of the above answers is correct because all three have had large swings over the last 20 years.
The amount Jacqueline receives for selling cupcakes beyond the minimum she would be willing to sell the cupcakes for is called
A) consumer surplus. B) producer surplus. C) cooperative surplus. D) deadweight loss.