Which of the following conditions holds for a monopolist, but not for a perfect competitor, at the profit-maximizing level of output?
A) Price = average revenue.
B) Marginal revenue = marginal cost.
C) Price > marginal cost.
D) Profit = (AR-ATC) x Q.
C
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Use the following supply and demand graph to answer the question below.
In the graph, line S is the current supply of this product, while line S1 is the optimal supply from the society's perspective. If government corrects this externality problem and shifts production to the socially optimal level, then the product price will be equal to
A. 0G. B. 0D. C. 0F. D. 0E.
One problem with changing the required reserve ratio is that
a. the policy must be kept secret from the public in order to have any effect b. the results are unpredictable c. the changes are usually not effective d. banks will often ignore the changes e. it takes too much time for these changes to affect the economy
Balanced budget multiplier (= +5 - 4 = 1. Thus the impact on economic equilibrium is exactly equal to the original change in government spending (and taxes). So we can say that ?Y = ?G.**)
What will be an ideal response?
If one player defects in a repeated game, and his opponent is following a tit-for-tat strategy, we can predict the opponent will:
A. renegotiate. B. cooperate and try to get his opponent to follow. C. defect in the next round. D. collude.