This graph shows the cost and revenue curves faced by a monopoly. 
According to the graph shown, if Q2 units are being produced, this monopolist:
A. is earning negative economic profits.
B. is earning zero economic profits.
C. may be earning zero accounting profits.
D. is earning positive economic profits.
Answer: D
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If there is no Ricardo-Barro effect, an increase in the government budget surplus will
A) lower the real interest rate. B) decrease the demand for loanable funds. C) raise the real interest rate. D) decrease the supply of loanable funds. E) not change the demand for loanable funds, the supply of loanable funds, or the real interest rate.
For a firm to be able to engage in price discrimination, it must
A) face a downward sloping demand curve. B) produce more than one product. C) have customers of different levels of wealth and age. D) have economies of scale.
NPV calculation need to include
A) only sunk costs of a project. B) only variable costs of a project. C) all costs related to a project. D) a risk-free rate as the discount rate.
Which of the following must occur as a result of ceilings on apartment rents that are set below market clearing rental rates?
A. Property owners respond to the ceilings by increasing maintenance and repairs. B. There is a decrease in the quantity of apartments that prospective tenants wish to rent. C. Property owners respond to the ceilings by constructing new apartment buildings. D. There is a decrease in the quantity of apartments that property owners offer for rent.