Which of the following is NOT true about a monopoly?
A. The demand curve for a monopoly's product is perfectly elastic.
B. For any given quantity the price of the monopoly's product will exceed the marginal revenue from that amount.
C. If the monopoly maximizes profit it will charge a price that exceeds marginal cost.
D. It must adjust output until marginal revenue equals marginal cost to maximize profit.
A. The demand curve for a monopoly's product is perfectly elastic.
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Reserves borrowed at the federal funds rate are usually repaid ________.
A. in one year B. the next day C. at the end of the month D. in five years
The hypothesis that regulators eventually are controlled by the regulated firms and their special interests is the
A) share-the-gains, share-the-pains hypothesis. B) capture hypothesis. C) public interest theory. D) control-group hypothesis.
Which of the following describes an external benefit resulting from an individual's purchase of a winter flu shot? a. A flu shot is less expensive than the cost of treatment when you get the flu
b. The income of doctors increases when you get a flu shot. c. A flu shot reduces the likelihood that others will catch the flu from you. d. A flu shot reduces the likelihood that you will miss work as a result of sickness, and, therefore, you will earn more income.
The Laffer curve reflects the view that when
A. tax rates are too low, raising them creates a greater incentive for suppliers to increase production. B. tax rates are too high, lowering them not only creates greater incentive for suppliers to increase production, but also ends up generating higher tax revenues. C. tax revenue is too low, the only way to increase it is through higher tax rates. D. tax rates are too high, lowering them also reduces tax revenue.