At a price of $10, the marginal revenue of a monopolist is $6. If the marginal cost of production is $8, what should the monopolist do in order to maximize profits?
A. Increase its price.
B. Decrease its price.
C. Keep its price at the same level.
D. There is not enough information to solve.
Answer: A
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Answer the following statement(s) true (T) or false (F)
1. The spot market is the market for goods that are to be delivered at a particular location, or “at that spot”. 2. There are three types of decision makers in a market economy, consumers, firms and resource suppliers. 3. Tastes and preferences are relevant to individual choices for consumption but not relevant to choices for supplying labor. 4. An individual's indifference curves between labor and consumption are upward sloping because both are desired. 5. Higher wages always cause a worker to increase the quantity of labor supplied.
Although rice is a staple of the Japanese diet, the Japanese government has long restricted the importation of rice into Japan. The result of this import quota is:
A) to decrease the price of rice to the Japanese people. B) to decrease the consumer surplus of Japanese rice consumers. C) to decrease the producer surplus of Japanese rice producers. D) a welfare gain for the Japanese people. E) to increase the consumption of rice by the Japanese people.
Refer to the above figure. The monopsonistic exploitation is
A) W2 - W5. B) W1 - W5. C) W2 - W4. D) W2 - W3.
According to the rational expectations school, when monetary policy makers do exactly what is expected of them, their efforts to stimulate the economy will have no effect on employment
a. True b. False Indicate whether the statement is true or false