Answer the next question based on the following demand and cost data faced by a pure monopolistDemand DataCost DataPriceQuantity DemandedOutputTotal Cost$2.7533$4.002.50444.502.25554.752.00665.751.75777.75The profit-maximizing price for the pure monopoly will be ________.
A. $2.00
B. $1.75
C. $2.25
D. $2.50
Answer: C
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Which of the following statements is correct? I. When economists derive the aggregate demand curve, they are looking at the effect of the price level on one commodity only. II. Any non-price-level change that increases aggregate spending on domestic goods shifts the AD curve to the right.
A) I only B) II only C) Both I and II D) Neither I nor II
Use the aggregate expenditures model and assume an economy is in equilibrium at $6 trillion which is $500 billion above full-employment GDP. If the marginal propensity to consume (MPC) is 0.75, full-employment GDP can be reached if government spending:
a. decreases by $75 billion. b. decreases by $125 billion. c. decreases by $500 billion. d. is held constant.
Using the labor market, the production function Real GDP = T (L, K), and the LRAS curve, describe the process by which a decrease in income taxes impacts economic growth
Net domestic product (NDP) is determined by
A. Subtracting depreciation from GDP. B. Adding appreciation to GDP. C. Adding consumption, investment, government expenditures, and net exports. D. Subtracting consumption from GDP.