Suppose we know that a monopolist is maximizing its profits. Which of the following is a correct inference? The monopolist has
A. maximized its total revenue.
B. set price equal to its average cost.
C. equated marginal revenue and marginal cost.
D. maximized the difference between marginal revenue and marginal cost.
Answer: C
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The level of fiscal federalism in the European Union is
A) too big to cushion member countries from adverse economic events. B) too small to cushion member countries from adverse economic events. C) appropriate to cushion member countries from adverse economic events. D) too big relative to the one in the U.S. E) similar in its level to that of the U.S.
A balance-of-payments surplus can be reduced with
A. Increased tariffs and quotas on foreign goods. B. Increased government spending. C. Increased taxes. D. Contractionary monetary policy.
Economists use the term self-interest to indicate that people ______.
a. mostly act for material gain b. are basically selfish c. make choices for personal satisfaction d. want to become wealthy