At the current price of a good, Al's consumer surplus equals eight, and Ben's consumer surplus equals 15. By charging a two-part tariff, a monopolist could increase his profit by
A) 8.
B) 16.
C) 15.
D) 30.
B
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If the money price of a resource such as oil falls, then the
A) LAS curve shifts rightward. B) LAS curve shifts leftward. C) SAS curve shifts leftward. D) SAS curve shifts rightward.
If average fixed cost exceeds average variable cost at a particular level of output: a. Profits must be negative
b. That fact is meaningless for deciding the quantity of output to produce. c. Output levels are probably quite low relative to the designed capacity of the production facility. d. Both b and c. are likely true.
Assume that in a purely competitive industry: (1) the entry and exodus of firms are the only long-run adjustments; (2) firms in the industry have identical cost curves; and (3) the industry is a constant-cost industry. Explain how long-run equilibrium
is eventually achieved in the industry when there are initially economic profits and losses. What will be an ideal response?
If the current account balance is -$450 billion, the capital and financial account balance is $440 billion, then the official settlements balance is
A) $890 billion. B) $0 because it is always zero. C) $10 billion. D) -$890 billion. E) -$10 billion.