Consider an unregulated monopoly in Figure 8.13. If that monopoly sets its price equal to its marginal cost, it would:
A. earn negative profits.
B. earn maximum profits.
C. earn zero profits.
D. earn small, but greater than zero, profits.
Answer: A
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The Lojack is an example of a product that:
A. produces a positive externality. B. contributes to illegal gambling on cards. C. contributes to global warming. D. produces a negative externality.
When a Mexican resident buys a ukulele from a U.S. producer, there is a(n)
A) increase in the supply of dollars in the foreign exchange market. B) decrease in the supply of dollars in the foreign exchange market. C) increase in the demand for dollars in the foreign exchange market. D) decrease in the demand for dollars in the foreign exchange market.
If a firm earns short-run losses, it exits in the long run.
Answer the following statement true (T) or false (F)
If Matt's disposable income increases from $4,000 to $4,500 and his level of saving increases from $200 to $325, it may be concluded that his marginal propensity to:
A. Consume is .80 B. Consume is .75 C. Consume is .60 D. Save is .30