A monopoly's economic profits are represented by:
a. (price minus marginal cost) times number of units sold.
b. (price minus average cost) times number of units sold.
c. (marginal revenue minus price) times number of units sold.
d. (marginal cost minus price) times number of units sold.
b
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In the principal-agent relationship between a bank manager and a bank teller, the manager is
A) an agent, as is the teller. B) an agent and the teller is a principal. C) a principal and the teller is an agent. D) a principal, as is the teller.
Other things constant, an increase in the price level will: a. shift the money demand curve to the right
b. shift the money demand curve to the left. c. increase the quantity of money people want to hold. d. decrease the quantity of money people want to hold. e. have no impact on the money demand curve.
When a person's income doubles, her consumption of each good will double in order for her to stay in consumer equilibrium
a. True b. False Indicate whether the statement is true or false
Under a corrective tax, _____
a. firms always have an incentive to use the least-cost method b. a one-size-fits-all tax will achieve an efficient outcome that maximizes net social welfare c. the deadweight loss caused by externality increases d. equilibrium occurs at a socially optimal level of output and a lower market price