For a monopolist, the reason that marginal revenue is less than price is
A. because of the U-shaped average revenue curve.
B. because of the lack of competition in the market.
C. because the monopolist must lower the price of the good in order to sell an additional unit.
D. because of the perfectly elastic demand curve that the monopolist faces.
Answer: C
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
The total amount of money that a government owes at a point in time is called:
A. a budget deficit. B. a budget surplus. C. public debt. D. national surplus.
Which of the following are goals for monetary policy?
A. Controlling rents B. Preventing boom and bust cycles in the economy C. Controlling world oil prices D. Monitoring corruption in the securities industry
Predatory pricing
A. is usually quite effective at driving smaller firms out of a market. B. is illegal under antitrust laws. C. is often an inexpensive way for a large firm to drive smaller firms out of a market. D. is a form of price leadership.