When a monopoly cuts its price to increase its sales, it experiences a gain in revenue due to the
Answer: Output effect.
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What is the marginal rate of substitution and how does it relate to an indifference curve?
What will be an ideal response?
When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________.
A. demand schedule B. market price C. quantity supplied D. demand curve
The same year that Derek Jeter, one-time shortstop for the New York Yankees, received an annual salary of $23.2 million, the president of the United States received an annual salary of $400,000. Based on marginal productivity theory and assuming these markets are competitive, this salary differential indicates that:
A. the president of the United States contributed much more to society than did Derek Jeter. B. the salary differential between Derek Jeter and the president of the United States indicated that their marginal productivities cannot be compared. C. Derek Jeter contributed much more to society than did the president of the United States. D. Derek Jeter and the president of the United States made equal contributions to society.
Taxes, transfer payments, and government purchases are the components of automatic stabilizers.
Answer the following statement true (T) or false (F)