If a government policy change harms a monopolist, the government could
A) tax those who get additional gains and compensate the monopolist, thereby making the change a Pareto improvement.
B) increase the general tax rate and compensate the monopolist, thereby making the change a Pareto improvement.
C) do nothing, because the change is a Pareto improvement.
D) It is not possible to mitigate the harm to a monopolist.
A
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Which of the following statements best describes the price, output, and profit conditions of monopoly?
a. Price will equal marginal cost at the profit-maximizing level of output and profits will be positive in the long-run. b. Price will always equal average variable cost in the short-run and either profits or losses may result in the long run. c. All of the answers are correct. d. In the long-run, positive economic profit will be earned.
Refer to the above data. If the consumer has a money income of $52 and the prices of J and K are $8 and $4 respectively, the consumer will maximize her utility by purchasing:
A) 2 units of J and 7 units of K. B) 5 units of J and 5 units of K. C) 4 units of J and 5 units of K. D) 6 units of J and 3 units of K.
A reduction in the level of unemployment would have which effect with respect to the nation's production possibilities curve?
A. It would shift the curve to the left. B. It would shift the curve to the right. C. It would not shift the curve; it would be represented by moving from a point inside the curve toward the curve. D. It would not shift the curve; it would be represented by moving from a point on the curve to a point outside the curve.
The natural rate of unemployment
A. exists only during periods of recession or depression in the economy. B. prevails in long-run macroeconomic equilibrium, when all workers and employers have fully adjusted to any changes in the economy. C. prevails in the short-run macroeconomic equilibrium, before workers and employers have had a chance to adjust to an economic shock. D. exists due to welfare and unemployment benefits that reduce potential workers' incentives to find work.