If a monopoly finds that at the present level of production, marginal revenue exceeds marginal cost, the firm should
a. shut down
b. increase production
c. maintain the production level because MR > MC signifies economic profit
d. decrease production so that MC will equal MR
e. raise price
B
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When the federal government decides to pay senators more than it pays soldiers, it answers the ________ question
A) why B) how C) for whom D) what E) where
The price of a good will tend to rise when
a. there is excess demand for the good. b. the supply of the good increases. c. demand for the good decreases. d. there is excess supply of the good.
An excise tax
A. is often used to encourage the use of a good. B. is a value added tax (VAT). C. acts as a negative incentive to consume that good or service. D. is illegal in most cities in the United States.
Vault cash is equal to $8 million, deposits by depository institutions at the central bank are $2 million, the monetary base is $30 million, and bank deposits are $100 million. The money multiplier is equal to
A. 5.0. B. 4.0. C. 2.5. D. 3.0.