For a non-discriminating monopolist to sell one more unit, it must
A. raise the price of only the last unit produced.
B. raise the price of the last as well as all previous units produced.
C. lower the price of the last as well as all previous units produced.
D. lower the price of only the last unit produced.
Answer: C
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Suppose real GDP was 100 in year 1 and 105 in year 2. The growth rate of real GDP is
A) 0.5 percent. B) 1.5 percent. C) 2.5 percent. D) 5 percent.
Refer to Table 13-3. What is the best course of action for the firm in the short run?
A) It should not cut its price but it should increase its sales by advertising. B) It should stay in business because it covers some of its fixed cost. C) It should shut down. D) It should increase its sales by lowering its price.
The principal-agent problem:
A. is when the principal has more information than the agent. B. is when the principal and agent have the same objectives. C. is when the agent is tempted to put in more effort than the principal would like. D. is commonly seen in the employer-employee relationship.
According to the income effect, when the price of a good increases, consumers ______.
a. switch to another similar good b. buy less of it due to their budget constraints c. gain less utility from that good d. experience consumer equilibrium