Refer to the above graph. The pure monopolist firm will charge a price of:
A. P1.
B. P2.
C. P3.
D. P4.
Answer: C
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An individual holds $10,000 in a non-interest-earning checking account, and the overall price level rises significantly. Other things being constant, we would expect
A) the individual's real wealth to decrease and consumption to decline. B) no change in the individual's real wealth but a decline in real national product. C) the individual's stock of real wealth to decrease but real national income to increase. D) the individual's wealth to increase.
An increase in the currency drain
A) leads to an increase in excess reserves. B) decreases the size of the money multiplier. C) results in an increase in deposits. D) results in an increase in required reserves.
Friedman and Schwarz argue that money is not neutral because
A) theoretical models of the economy don't show monetary neutrality. B) money is a leading, procyclical variable. C) they found several historical incidents in which changes in the money supply were not responses to macroeconomic conditions, and output moved in the same direction as money. D) they found no evidence that productivity changes or changes in government spending contributed to business cycles; only monetary changes preceded every recession.
Economic profits are maximized at the point at which
A) marginal revenues equal marginal costs. B) accounting profit exceeds economic profit. C) total revenues are greater than total costs. D) accounting profits are equal to zero.