To maximize its profit, a perfectly competitive firm produces so that ________ and a single-price monopoly produces so that ________
A) MR = MC; MR > MC
B) MR > MC; MR = MC
C) MR = MC; MR = MC
D) MR > MC; MR > MC
E) P = ATC; P = ATC
C
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When the Fed lowers the federal funds rate, it can lead to
A) the Fed selling government securities. B) an increase in lending by banks. C) a decrease in demand deposits. D) a decrease in the quantity of money.
A surplus occurs when the price is
A) less than the equilibrium price. B) equal to the equilibrium price. C) greater than the equilibrium price. D) None of the above because the existence of a surplus is independent of the price of the good.
A natural event, such as earthquakes and floods, can trigger a business cycle, according to advocates of the
a. external cycle theory b. housing cycle theory c. innovation cycle theory d. internal cycle theory e. real business cycle theory
Which would be the most accurate statement?
A. No one enjoys a consumer surplus. B. We enjoy a consumer surplus on many goods and services. C. We enjoy a consumer surplus on all goods and services.