Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist.
At the monopolist's profit-maximizing level of output, deadweight loss equals the area:
A. C0N
B. ALN
C. JKN
D. JLN
Answer: D
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One policy that would increase the saving rate would be
A) raising taxes on the returns to saving. B) raising taxes on the returns to investment. C) taxing consumption. D) raising taxes on saving.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same. b. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). c. The GDP Price Index and reserve-related (central bank) transactions remain the same. d. The GDP Price Index rises, and reserve-related (central bank) transactions become more positive (or less negative). e. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same.
What are the conditions for price discrimination?
After much anticipation a company releases a new smartphone. The smartphone doesn't work as well as expected and lacks many of the features buyers had been expecting. The unexpectedly negative reaction to the smartphone would
a. raise the present value and the price of the corporation's stock. b. raise the present value and reduce the price of the corporation's stock. c. reduce the present value and the price of the corporation's stock. d. reduce the present value and raise the price of the corporation's stock.