Which of the following is a TRUE statement about a monopoly?
A. A monopoly does not necessarily earn positive economic profits.
B. As long as the demand curve slopes down, a monopoly can always find some price-output combination that generates positive economic profits.
C. A monopoly must earn an above-normal profit to stay in business.
D. As long as there are barriers to entry, a monopoly can always find some price-output combination that generates positive economic profits.
Answer: A
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Refer to Table 23-1. Using the table above, compute aggregate expenditure and identify the macroeconomic equilibrium
What will be an ideal response?
If the Federal Reserve Banks goal was to use open market operations to contract the economy it could move from:
A. MS1 to MS3
B. MS3 to MS4
C. MS4 to MS3
D. MS2 to MS3
Self-adjustment of markets is assumed in:
A. Classical economic theory. B. Keynesian theory. C. Supply-side economic theory. D. The eclectic viewpoint.
Figure 8.6 depicts a monopolistically competitive firm in the long run. Illustrate on the graph the firm's price and output level in long-run equilibrium. Explain.
What will be an ideal response?