Keynes argued that an economy could be in equilibrium when the economy was
A. operating with some unutilized productive capacity.
B. trying to operate at some output level beyond its potential capacity.
C. operating either at full productive capacity or at less than full capacity.
D. operating at maximum potential capacity.
Answer: C
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For a single-price monopoly,
A) if marginal cost exceeds marginal revenue, profits will increase if output decreases. B) if marginal revenue exceeds marginal cost, profits will increase if output decreases. C) there are several different price and output combinations that maximize profit. D) marginal revenue will be greater than price if demand is elastic. E) marginal revenue will be greater than price if demand is inelastic.
Price cap regulation involves
A) setting the monopoly's price equal to its average total cost. B) setting the monopoly's price equal to its profit-maximizing price. C) setting a maximum price the monopoly may charge. D) assuming a natural monopoly will not charge a higher than profit-maximizing price. E) setting the monopoly's price equal to its marginal cost.
Refer to the above figure. A movement from point A to point B for a good is most likely a result of
A) an increase in the price of that good. B) a decrease in the price of that good. C) an expectation of an increase in the relative price of that good. D) an expectation of a decrease in the relative price of that good.
The requirement that New York City taxi drivers own a "medallion" in order to operate a taxi in the city reduces competition and raises the fares that customers pay
a. True b. False