The MR = MC rule:
A. applies only to pure competition.
B. applies only to pure monopoly.
C. does not apply to pure monopoly because price exceeds marginal revenue.
D. applies both to pure monopoly and pure competition.
Answer: D
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An important reason for the Industrial Revolution to have started in Britain is that:
A) there were high entry barriers in British markets. B) Britain had a patent system. C) entrepreneurship was discouraged in Britain. D) Britain had extractive institutions.
According to the Taylor rule, which of the following will lead to a higher nominal federal funds rate?
A) an increase in inflation B) a positive output gap C) a positive inflation gap D) all of the above E) none of the above
Refer to the diagram. The firm will shut down at any price less than:
A. P 1 .
B. P 2 .
C. P 3 .
D. P 4 .
When output increases from Q1 and the price level decreases from P1, this change will:
Refer to the graph above.
A. Be caused by a shift in the aggregate supply curve from AS1 to AS2
B. Be caused by a shift in the aggregate supply curve from AS1 to AS3
C. Result in a movement along the aggregate demand curve from e1 to e2
D. Result in a movement along the aggregate demand curve from e3 to e1