When a regulator allows a monopolist to set its price equal to long-run average cost, the regulator is practicing
A. average cost pricing.
B. operating cost pricing.
C. marginal cost pricing.
D. optimal cost pricing.
Answer: A
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The aggregate demand curve shows the relationship between short-run equilibrium output and the:
A. inflation rate. B. unemployment rate. C. real interest rate. D. nominal interest rate.
Present bias implies that:
A) a consumer gives much more weight to the future than to the present. B) a consumer gives much more weight to the present than to the future. C) discount weights for delayed consumptions will always equal one. D) discount weights for delayed consumptions will always be greater than one.
The figure above shows Clara's demand for CDs. If the price for a CD is $15, then Clara
A) receives no consumer surplus on the 6th CD she buys. B) receives a total of $10 of consumer surplus. C) will buy no CDs. D) receives a total of $40 of consumer surplus.
Refer to the above table. If the price is $6, the perfectly competitive firm should produce
A) 104 units. B) 105 units. C) 106 units. D) 107 units.