At equilibrium in a monopoly, economic profits will most likely be
A. Greater than zero.
B. Negative.
C. Zero.
D. Normal.
Answer: A
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An increase in government purchases of $200 billion will shift the aggregate demand curve to the right by
A) less than $200 billion. B) more than $200 billion. C) $200 billion. D) None of the above are correct. This policy shifts the long-run aggregate supply curve.
What is true of the price elasticity of demand faced by a monopoly firm?
A) Demand is inelastic. B) Demand is more elastic at lower prices and more inelastic at higher prices. C) Demand is perfectly elastic because the monopolist has no competition. D) Demand becomes more elastic as the range of imperfect substitutes expands.
The scope of a firm refers to its
A) vertical boundaries. B) economies of scale. C) horizontal boundaries. D) all of these choices.
Total physical product shows what happens to the quantity of an output when the firm changes the quantity of an input
a. True b. False Indicate whether the statement is true or false