A monopoly arises when there:
a. is a firm desiring to compete in many markets.
b. is a firm wanting to maximize profits.
c. are barriers to the entry of other firms in the industry.
d. is government intervention to establish and enforce a price ceiling.
Ana: c. are barriers to the entry of other firms in the industry.
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In the table above, in terms of units of hamburgers, real income is
A) lower in case A than in cases B and C. B) lower in case B than in cases A and C. C) lower in case C than in cases A and B. D) equal in all three cases.
If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should:
a. raise prices 1 percent. b. lower prices 1 percent. c. raise prices until the elasticity becomes very high. d. keep the price where it is. e. lower prices until the elasticity becomes very high.
Excessive use of monetary or fiscal policies to achieve stabilization may:
A) require the cooperation of firms and the public in order to be effective. B) backfire if the economy becomes destabilized through erratic application. C) never be necessary as long as the economy can rely on automatic stabilizers. D) be better than weaker measures that may not hit the target.
Which one of the following is not one of the so-called G8 nations?
A. Japan. B. Canada. C. United States. D. China.