Answer the following statements true (T) or false (F)
1. For a monopolist maximum profits will occur when the gap between average revenue (or price) and average cost is biggest.
2. In the long run equilibrium, a monopolist will earn zero economic profits.
3. In a monopoly at equilibrium, price is greater than marginal cost.
4. A monopolist will try to charge the highest price that it can charge.
5. In an unregulated monopoly at equilibrium, the output level is higher than the economically efficient level.
1. FALSE
2. FALSE
3. TRUE
4. FALSE
5. FALSE
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Which of the following statements is true?
A) Opportunity cost = explicit cost - implicit cost. B) Variable cost = wages + salaries + benefits. C) Total cost = fixed cost + variable cost. D) Total cost = fixed cost + implicit cost.
Refer to the information provided in Table 6.1 below to answer the question(s) that follow. Table 6.1Number of Hamburgers per DayTotal UtilityMarginal Utility130?252?367?476?5?4Number ofSodas per DayTotal UtilityMarginal Utility120?235?347?457?5?7Refer to Table 6.1. Assume that a store is giving hamburgers and sodas away for free. Consumers can have as many sodas and hamburgers as they want, but the food has to be consumed one unit at a time. If George has already had one soda and two hamburgers, then George should
A. be indifferent between consuming the second soda or the third hamburger. B. consume neither another soda nor another hamburger to maximize his utility. C. next consume a hamburger to maximize his utility. D. next consume a soda to maximize his utility.
If the producers bear a smaller tax incidence than the buyers in a market, which of the following must be true?
A. It must be a market for luxury items. B. Their supply curve must be less elastic than the buyers demand curve in this market. C. It must be a market for inferior goods. D. Their supply curve must be more elastic than the buyers demand curve in this market.
Would a change in the price of in-line skates cause a change in the supply of in-line skates? Why or why not?
What will be an ideal response?