A profit-maximizing monopolist
a. never produces on the inelastic portion of the demand curve because it can increase profit by increasing output
b. never produces on the inelastic portion of the demand curve because marginal revenue exceeds marginal cost
c. always produces on the inelastic portion of the demand curve
d. never produces on the elastic portion of the demand curve because there are no substitutes for the good it produces
e. never produces on the inelastic portion of the demand curve because marginal revenue is negative there
E
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Answer the following statements true (T) or false (F)
1. To calculate the rate of return on a particular bond, multiply the coupon rate by the interest rate, then add the result to the face value of the bond. 2. Equity is the monetary value that would remain after a house is sold and any bank loans repaid. 3. Accumulating hundreds of thousands of dollars by retirement is not an achievable goal even for a well-educated person who starts saving early in life. 4. Firms make and sell an astonishing array of goods and services, and an investor can receive a return on the company’s decisions by buying stock in that company. 5. In recent years, laws have been enacted in many states to discourage citizens from voting, rather than making it easier for them to vote.
The morel is a prized mushroom that is often abundant in the Western United States in years after forest fires. Suppose two companies are buying morels from workers willing to find them. One company offers to pay workers $5.00 per pound, and the other company will pay workers only $4.00 per pound. Economists would say that:
A. the higher-paying company will attract the more creative and innovative pickers and the lower-paying company will attract the others. B. the lower-paying company will attract the more creative and innovative pickers and the higher-paying company will attract the others. C. the company willing to pay only $4.00 has a comparative advantage in selling morels. D. this situation violates the law of one price and is not likely to persist.
If the own P elasticity of D for Krazy Kids shoes is -0.4 and the company raises its P by 10%, what will be the change in quantity demanded of Krazy Kids shoes?
a) +4% b) -4% c) +25% d) -25% e) -400%
Rational people having preferences for immediate benefits and delayed costs is another way of saying that:
A. money is worth less to us now than in the future. B. money is worth more to us now than in the future. C. the value of money does not change over time. D. rational people have insatiable wants.