In monopoly, the firm ______.
a. is a price taker
b. will only operate on the bottom half of its demand curve
c. cannot set both its price and the quantity sold; if the monopolist reduces output, the price will rise, and if the monopolist expands output, the price will fall
d. all of these
Ans: c. cannot set both its price and the quantity sold; if the monopolist reduces output, the price will rise, and if the monopolist expands output, the price will fall
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In evaluating the degree of economic efficiency in a market, we can state that the size of the deadweight loss in a market will be smaller
A) the greater the difference between marginal cost and average revenue. B) the smaller the difference between marginal cost and price. C) the greater the difference between marginal cost and price. D) the smaller the difference between marginal cost and average total cost.
You want to invest in a firm whose profits show small fluctuations throughout the business cycle. Which of the following would you invest in?
A) A corporation that depends heavily on business fixed investment B) A corporation that depends heavily on residential investment C) A corporation that depends heavily on consumer nondurables D) A corporation that depends heavily on consumer durables
Bracket creep forces taxpayers to pay a larger percentage of their income in taxes when which of the following occurs?
(a) The emergence of high unemployment (b) Inflation (c) Deflation (d) The growth of trade deficit(s)
The marginal revenue product is
A) the change in total output resulting from a one-unit change in variable output. B) the change in marginal output resulting from a one-unit change in variable input. C) the change in total revenue resulting from a one-unit change in variable input. D) the change in marginal revenue resulting from a one-unit change in variable input.