Which of the following is true of marginal revenue for a monopolist that charges a single price?
a. P = MR because there are no close substitutes for the monopolist's product.
b. P > MR because the monopolist must decrease price on all units sold in order to sell an additional unit.
c. P < MR because the monopolist must decrease price on all units sold in order to sell an additional unit.
d. P = MR only at the profit-maximizing quantity.
B
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When the government enacts fiscal policy, it:
A. may not always be able to improve matters. B. might make things worse. C. can bring the economy to its long-run equilibrium more quickly than it can correct itself. D. All of these are true.
Holding other factors constant, if oil prices rise relative to the prices of other products, then the real wages of oil workers will ________ and employment of oil workers will ________.
A. decrease; not change B. decrease; increase C. increase; increase D. increase; decrease
If G = $800 billion, tax receipts = $850 billion, and there is an inflationary gap of $100 billion, there is
A. a budget surplus. B. a budget deficit. C. not enough information to determine whether there is a budget surplus or a budget deficit.
In the money market, if the money supply decreases, the opportunity cost of holding money _____
Fill in the blank(s) with the appropriate word(s).