Explain whether a monopoly that maximizes profit will also be maximizing revenue and production
What will be an ideal response?
Profit maximization is not the same thing as revenue maximization. To maximize revenue the firm would produce up to the point where marginal revenue is zero. Unless marginal cost is zero, this is a larger quantity than the quantity where marginal revenue equals marginal cost. Maximizing production could mean producing the physical maximum possible. This is likely to be far beyond the profit-maximizing level of output.
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Which of the following would shift a nation's production possibilities frontier inward?
A) an increase in the unemployment rate B) producing more capital equipment C) a law requiring workers to retire at age 50 D) discovering a cheap way to convert sunshine into electricity
You are thinking about buying a house. You find one you like that costs $200,000 . You learn that your bank will give you a mortgage for $160,000 and that you would have to use all of your savings to make the down payment of $40,000
You calculate that the mortgage payments, property taxes, insurance, maintenance, and utilities would total $950 per month. Is $950 the cost of owning the house? What important factor(s) have you left out of your calculation of the cost of ownership?
The Federal Reserve System controls the money supply primarily through
A. open market operations. B. accounting operations. C. reserve requirement changes. D. jawboning.
Supply-side theory suggests that
A) aggregate supply does not depend on labor productivity. B) increased government spending does not increase aggregate demand. C) lower tax rates may not reduce overall tax revenues. D) increased labor productivity may not increase real output.