If a monopolist is producing the quantity at which marginal revenue exceeds marginal cost, it should
A. increase output if it wants to maximize profits.
B. continue to produce this amount if it wants to maximize profits.
C. reduce output if it wants to maximize profits.
D. reduce price and keep output unchanged if it wants to maximize profits.
Answer: A
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Acme Inc found a tricky way to conform to the letter of the law with respect to new EPA regulations, even though they violated the spirit of the law. This is called
A) the capture theory. B) collusive response. C) share-the-gains, share-the-pains theory. D) creative response.
Price elasticity of demand is defined as
A) the percentage change in the quantity demanded of some product resulting from a one percent change in price. B) the percentage change in the quantity demanded of some product resulting from a change in price. C) the change in quantity demanded resulting from a one percent change in price. D) the change in quantity demanded resulting from a change in price.
Because there is no way to account for them, the official unemployment rate does not include discouraged workers. What would happen to the unemployment rate if, because of a program that gave them new hope, all discouraged workers suddenly begin reporting themselves as ready to work?
a. The official unemployment rate would remain unchanged. b. The size of the labor force would increase. c. The size of the labor force would remain unchanged. d. The official unemployment rate would decrease. e. The size of the underground economy would shrink.
The monopolist faces the market demand curve
a. True b. False Indicate whether the statement is true or false