A monopoly produces widgets at a marginal cost of $10 per unit and zero fixed costs. It faces an inverse demand function given by P = 50 ? Q. What are the profits of the monopoly in equilibrium?
A. $600
B. $500
C. $300
D. $400
Answer: D
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Economists use the term externalities to refer to
A) consequences people ignore in their decision making. B) any cost associated with an action. C) foreign imports or exports. D) the behavior in which people actually engage as distinct from their alleged reasons for acting as they do. E) the outside directors of a corporation as distinct from corporate directors who are also managers.
In September 2007, Regions Bank held $3 million in reserves against M1 deposits and made $83 million in loans. Between September 2007 and September 2008, deposits decreased from $114 million to $95 million
If Regions Bank wants to maintain its desired reserve ratio in 2008, it will A) increase its reserves. B) definitely make more loans. C) cannot make more loans. D) decrease its reserves.
During the recession phase of the business cycle
A) unemployment is usually falling. B) production is usually rising. C) interest rates are usually falling. D) income is usually rising.
A variable that tends to move at the same time as aggregate economic activity is called
A) a leading variable. B) a coincident variable. C) a lagging variable. D) an acyclical variable.