Consider an unregulated monopoly in Figure 13.2. If that monopoly sets its price equal to its marginal cost, it would:
A. earn negative profits.
B. earn maximum profits.
C. earn zero profits.
D. earn small, but greater than zero, profits.
Answer: A
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Proponents of the estate and gift tax argue that the tax is necessary because
A) it generates a large portion of total federal revenue. B) it prevents "unfair" accumulation of wealth across generations. C) it is the primary source of funding for Medicare and Medicaid. D) it is only applied to items that have not previously been taxed.
In a small town, Marilyn's Christmas Tree Lot has a monopoly on sales of Christmas trees. In order to increase her sales from 100 trees to 101 trees, she must drop the price of all of her trees from $20 to $19. What is the marginal revenue?
A) $2000 B) $20 C) $19 D) negative $81
A firm has successfully adopted a positive technological change when
A) it can produce more output using the same inputs. B) it sees an increase in worker productivity. C) it produces less pollution in its production process. D) it can pay its workers less yet increase its output.
To an economist, a decrease in supply means a: a. rightward shift of the supply curve
b. movement up along a supply curve. c. leftward shift of the supply curve. d. movement down along the supply curve.