Consider a profit-maximizing monopoly pricing under the following conditions. The profit-maximizing quantity is 40 units, the profit-maximizing price is $160, and the marginal cost of the 40th unit is $120 . If the good were produced in a perfectly competitive market, the equilibrium quantity would be 50, and the equilibrium price would be $150 . The demand curve and marginal cost curves are
linear. What is the value of the deadweight loss created by the monopolist?
a. $40
b. $100
c. $200
d. $400
c
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A flexible exchange rate system crisis involves
A) a revaluation of the currency. B) a rapid and uncontrolled depreciation of the currency. C) a decrease in the dollar value of the country's international debt. D) a sure political collapse of the ruling government. E) All of the above.
An increase in the amount of competition with other firms that employ "best practices" would be likely to cause a particular firm's labor productivity to:
A) increase B) stay the same. C) decrease. D) cannot be determined without additional information.
The distinction between productivity levels and productivity growth rates is theoretical, and has no practical application
a. True b. False Indicate whether the statement is true or false
If all firms have the same costs of production, then in long-run equilibrium,
a. price exceeds average total cost for all firms. b. price exceeds marginal cost for all firms. c. some firms may earn positive economic profits. d. all firms have zero economic profits and just cover their opportunity costs.