With average cost pricing, the monopolist
A) earns no accounting profit.
B) produces where P = MC.
C) earns a normal rate of return for its shareholders.
D) does not cover opportunity costs.
C
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Cost-benefit analysis requires:
A) choosing the alternative with the least net benefit. B) all costs and benefits to be measured in the same unit. C) evaluating the budget constraint before making a choice. D) that the risks associated with different alternatives are ignored.
An above full-employment equilibrium is
A) a theoretical possibility but cannot happen in reality. B) the equilibrium in which the economy is in most of the time. C) when real GDP exceeds potential GDP. D) the period of time when prices are falling.
Refer to Table 1-4. What is Eva's marginal cost if she decides to stay open for two hours instead of one hour?
A) $12 B) $24 C) $36 D) $71
The goods and services that count toward GDP are defined in terms of:
A. the location of production, not the citizenship of the producer. B. the citizenship of the producer, not the location of production. C. citizens producing within a country's borders. D. total production of companies owned by citizens, regardless of the actual location of production.