Assuming that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?
a. The output of the monopolist will be too large and its price too high.
b. The output of the monopolist will be too large and its price too low.
c. The output of the monopolist will be too small and its price too high.
d. The output of the monopolist will be too small and its price too low.
C
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The concept of inferior goods can be used to show that
A) lower prices signal poorer quality. B) indifference curves can have positive slopes. C) being able to consume more of all goods does not mean that a person will consume more of every good. D) consumers will always buy more of all products if their incomes increase.
If the government wanted to reduce interest rates without changing output, it should
a. increase consumption and reduce the money supply. b. increase the money supply and raise government spending. c. increase the money supply and raise taxes. d. both b and c.
The main advantage of a corporate form of organization is that
A. shareholders have unlimited liability. B. all corporate profits must be distributed as dividends. C. shareholders have limited liability. D. shareholders are not subject to double taxation.
Assuming there is no government or foreign sector, if the multiplier is 10, the MPC is
A. 0.9. B. 0.8. C. 0.5. D. 0.1.