For a monopolist with a linear demand curve, total revenue is maximum when:
a. marginal revenue is positive.
b. marginal revenue is at its maximum.
c. the price elasticity of demand is greater than unity.
d. the price elasticity of demand is equal to unity.
e. marginal revenue is at its minimum.
d
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All of the following are ground rules government can establish to help markets function well except
A) competition. B) honesty. C) information. D) collusion.
When drawn correctly and preferences are consistent, indifference curves do not intersect.
Answer the following statement true (T) or false (F)
Which of the following statements is true?
A) The supply of oil is perfectly inelastic; therefore, as the demand for oil increases over time the price of oil increases significantly. B) The supply of oil is very inelastic over short time periods but becomes more elastic over time. A given shift in supply results in a smaller increase in the price of oil when the supply is more elastic. C) Over short periods of time increases in the demand for oil are greater than increases in the supply of oil. Over the long run increases in the demand and the supply of oil are about equal. As a result, the price of oil increases greatly in the short run but is stable in the long run. D) The supply of oil is very elastic over short time periods but becomes perfectly inelastic over time. A given shift in supply results in a greater increase in the price of oil when the supply of oil is perfectly inelastic.
Inflation: a. always reduces real income
b. never reduces real income. c. reduces the real income of workers when wages increase more than prices do. d. reduces the real income of workers when wages increase less than prices do. e. increases the real income of workers only when wages increase less than prices do.