If a perfectly competitive industry were taken over by a monopoly, the monopoly would usually produce more output and charge a higher price
a. True
b. False
B
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Contractionary fiscal policy involves decreasing government purchases or increasing taxes
Indicate whether the statement is true or false
Suppose a monopoly firm has an annual demand function of Qd = 20,000 - 250P, annual variable costs of VC = 16Q + 0.002Q2 and marginal cost of MC = 16 + 0.004Q, where Q is the annual quantity of output. In addition, the firm has an avoidable fixed cost of $25,000 per year. If this firm maximizes its profit, what is the value of aggregate surplus?
A. $247,250 B. $272,250 C. $242,000 D. $217,000
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). b. There is not enough information to determine what happens to these two macroeconomic variables. c. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). d. The quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending remain the same. e. The quantity of real loanable funds per time period rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
Alpha has $40,000 of capital per worker, while Beta has $5,000 of capital per worker. In all other respects, the two countries are the same. According to the principle of diminishing returns to capital, an additional unit of capital will increase output ________ in Alpha compared to Beta, holding other factors constant.
A. more B. not at all C. less D. by the same amount