If a monopolist's marginal revenue exceeds its marginal cost at its current level of output, then to maximize its profit the monopolist should:
A. do nothing.
B. increase output until marginal revenue equals marginal cost.
C. increase output until price equals marginal cost.
D. decrease output in order to increase the gap between marginal revenue and marginal cost.
Answer: B
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In 2014, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. In the current market for peanut butter, the price falls and the quantity decreases
This set of results means that A) supply decreased by more than demand increased. B) demand increased by more than supply decreased. C) demand increased by more than supply increased. D) supply decreased by more than demand decreased.
Refer to Figure 4-4. What is the value of the deadweight loss at a price of $18?
A) $100 B) $180 C) $660 D) $1,040
Which of the following is true?
a. The stock market provides investors with an opportunity to own a fractional share of the firm's future profits. b. A new stock issue is often an excellent way for a firm to raise funds for future expansion. c. Changes in stock prices provide information about what investors think of various business decisions. d. All of the above are true.
Which of the following practices are, at least in part, attempts to reduce moral hazard problems?
a. The income of waiters and waitresses depends heavily on tips. b. An employer pays below equilibrium wages because he thinks his employees are not working as hard as they could be. c. The professors leaves the room to prevent cheating on exams. d. Tenure professors are not supervised closely.