Assume the figure applies to a pure monopolist and that MC is the same for both graphs. If this firm is able to price discriminate between children and adults, its profit-maximizing level of output will be:
A. Q 1A + Q 1C .
B. Q 1C + Q 2 .
C. Q 1A + Q 2 .
D. Q 1A + Q 1C + Q 2 .
B. Q 1C + Q 2 .
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When the firm produces the quantity that sets marginal revenue equal to marginal cost, a perfectly competitive firm is
A) determining the price it will set. B) maximizing its revenues. C) maximizing its profit. D) establishing its shutdown point.
Why would workers and retirees want to have their wages and benefits indexed to the Consumer Price Index (CPI)?
a. To lower their purchasing power during years of rising prices b. To maintain their purchasing power during years of rising output c. To maintain their purchasing power during years of declining output d. To increase their purchasing power during years of negative inflation e. To maintain their purchasing power during years of rising prices
Each firm's capital stock is fixed in the short run. Therefore, if the price of capital increases, then in the short run the market demand curve for labor in a perfectly competitive market will
a. shift inward. b. be unaffected. c. shift outward. d. change slope.
Most economists agree that
a. fiscal policy is a more effective stabilization tool than monetary policy. b. it is difficult to time discretionary changes in macro-policy in a manner that will promote stability. c. monetary policy should focus on reducing unemployment, while fiscal policy should focus on the control of inflation. d. discretionary macro-policy can easily be instituted in a manner that will promote economic stability.