Suppose Acme and Mega produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product. 
For a monopolist facing this demand curve, the profit-maximizing quantity is ________ and the profit-maximizing price is ________.
A. 50; $3
B. 100; $2
C. 50; $2
D. 100; $1
Answer: B
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Refer to Figure 2-2. Suppose Mendonca is currently producing 60 pounds of vegetables per period. How much meat is it also producing, assuming that resources are fully utilized?
A) 45 pounds of meat B) 75 pounds of meat C) 80 pounds of meat D) 100 pounds of meat
With respect to welfare economics, why is the equilibrium price of a product considered to be the best price?
a) It minimizes costs and maximizes profits of sellers. b) It minimizes the level of welfare payments to those who no longer live below the poverty line. c) It maximizes total revenue to firms and total utility to buyers. d) It maximizes the total welfare of buyers and sellers.
Aggregate demand and supply curves have been widely used to analyze the performance of the macroeconomy. Figure 5-3 shows four diagrams that represent different changes in the macroeconomy. Choose the diagram that best represents the situations described in the following questions.Figure 5-3
Which graph in Figure 5-3 best represents the supply-side shock of the 1970s oil crisis?
A. 1 B. 2 C. 3 D. 4
Which of the following is not a factor that influences investment spending?
A. Transfer payment policy B. Business confidence C. Business expectations D. Technical change