The profit maximizing rule P = MC applies to:
A. both perfectly competitive firms and imperfectly competitive firms.
B. all firms.
C. perfectly competitive firms only.
D. monopolists only.
Answer: C
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Refer to Figure 15-6. The monopolist's total cost is
A) $1,116. B) $1,240. C) $1,660. D) $1,726.40.
Measured in BTUs per dollar of real GDP, energy consumption fell by only 5 percent between 1970 and 1975, but had fallen by almost 30 percent by 1990 . These figures illustrate the fact that
a. energy demand does not respond to price changes in the short run. b. energy demand does not respond to price changes in the long run. c. energy demand is more elastic in the short run than in the long run. d. energy demand is more elastic in the long run than in the short run.
A meditation class meets on the second floor of a building; the first floor is a nightclub. The loud music from the club disturbs the classes. Which of the following best explains why the negative externality faced by the class arises?
a. The class has no property right to a quiet environment. b. The club has a property right on the ground floor. c. The class has a property right on the second floor. d. The club uses an inappropriate technology (i.e., no soundproofing). e. Both the club and class are profitable.
"Budget deficits are inflationary." The truth of this statement depends on
a. aggregate demand in the economy. b. the shape of the aggregate supply curve. c. the size of the national debt. d. existing debt as a percentage of GDP.