You are the manager of a monopoly that faces a demand curve described by P = 85 ? 5Q. Your costs are C = 20 + 5Q. The profit-maximizing price is:
A. 60.
B. 55.
C. 45.
D. 50.
Answer: C
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Perfect competition forms one extreme of the market structure spectrum.
Answer the following statement true (T) or false (F)
A weakness of the simple Keynesian model is that it does not recognize that because the transactions demand for money __________ as income increases, the interest rate __________ as income rises
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
"Protection" is designed to help
a. firms whose relative inefficiency does not permit successful competition with imports. b. workers who have very high productivity, and cannot survive against low-paid foreign workers. c. government that needs revenue from tariffs and quotas to cover government spending. d. firms that are highly efficient, and cannot survive against low-price foreign imports.
A U.S. bank wants to buy euros in order to buy German bonds. In the open-economy macroeconomic model, this transaction would be part of
a. the supply of currency in the foreign exchange market, and part of the supply of loanable funds. b. the demand for currency in the foreign exchange market, and part of the supply of loanable funds. c. the supply of currency in the foreign exchange market, and part of the demand for loanable funds. d. the demand for currency in the foreign exchange market, and part of the demand for loanable funds.