Suppose that a monopoly firm is required to pay a new annual license fee to do business in its city and that the fee is somewhat less than the economic profit the firm is now earning. In response to the increase in fees, the firm will:
a. not change its price.
b. raise its price by somewhat more than amount of the license fee.
c. raise its price by less than the amount of the license fee.
d. raise its price by the amount of the license fee.
a. not change its price.
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Although all points on the production possibilities frontier are efficient, that alone does not determine which point is “best” for the society.
Answer the following statement true (T) or false (F)
Suppose there are 11 buyers and 11 sellers, each willing to buy or sell one unit of a good, with values {$14, $13, $12, $11, $10, $9, $8, $7, $6, $5, $4,}. Assume no transaction costs and a competitive market. Now suppose competition among several market makers forces the spread down to $4 . How many goods are traded?
a. Four b. Five c. Six d. Seven
Consumers will ________ interest-sensitive consumption spending, when interest rates are higher
Fill in the blank(s) with the appropriate word(s).
If the marginal product of capital doesn't change as the amount of capital increases, a figure showing the relationship between output and capital
A. slopes upward with a slope that declines as the amount of capital increases. B. is a vertical line. C. is a straight line with a slope of zero. D. is a straight line with constant upward slope.