The above figure shows the demand, marginal revenue, and cost curves for a natural monopoly
a. Which price and quantity is set if the capture theory is correct?
b. If production is at the price and quantity specified in part (a), what area represents the economic profit?
c. If production is at the price and quantity specified in part (a), what area represents the deadweight loss?
d. If production is at the price and quantity specified in part (a), what area represents the consumer surplus?
a. The profit-maximizing price and quantity are P2 and Q1.
b. The economic profit equals the area of the rectangle P2abP3.
c. The deadweight loss is the area of the triangle acd.
d. The consumer surplus is the area of the triangle P1aP2.
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Other things the same, if the interest rate falls, then
a. firms will want to borrow more, which increases the quantity of loanable funds demanded. b. firms will want to borrow less, which decreases the quantity of loanable funds demanded. c. firms will want to borrow more, which increase the quantity of loanable funds supplied. d. firms will want to borrow less, which decreases the quantity of loanable funds supplied.
There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell.
Suppose 10 shells have been fired off. What is the marginal cost of firing off one more shell?
A. $100 B. $25 C. $10 D. $0
The agent is an individual:
A. hired by the principal to achieve goals. B. hired by the principal to consult with him. C. who acts independently of the principal. D. who can direct the principal to achieve goals.
When using a logarithmic scale to plot output per capita over time, an upward-sloping curve that becomes increasingly steep indicates
A) output per capita is not changing. B) output per capita is growing by a constant amount each year. C) output per capita is growing by a constant percentage each year. D) output per capita is growing by an increasing percentage each year. E) output per capita is not defined.