For this question, assume that firms experience an increase in sales. We would expect that this increase in sales will cause
A) an increase in profit per unit of capital.
B) a decrease in profit per unit of capital.
C) no change in profit per unit of capital.
D) ambiguous effects on profit per unit of capital.
E) none of the above
A
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For social surplus to be maximized, the ________ buyers are actually making a purchase and the ________ sellers are selling the products
A) lowest-value; highest-cost B) highest-value; lowest-cost C) highest-value; highest-cost D) lowest-value; lowest-value
The market demand for a public good can be determined by
A) adding up the total private benefits and external benefits that each quantity provides the citizens of a country. B) adding up how much each consumer is willing to pay for each unit of the public good. C) adding up how much each citizen expects to consume at each possible price. D) estimating the value of the benefit that each unit provides and multiplying that by the number of consumers.
If the demand shifts, then for a profit maximizing monopolist,
A) price will change while quantity will remain constant. B) price will change and quantity will change. C) Both A and B. D) Neither A nor B.
Suppose Arf n' Barf restaurant has a monopoly on restaurant food in a certain small town. Their rent, which is one of several fixed costs they pay whether they sell food or not, has gone up. In the short run, the Arf n' Barf should
a. pay the higher rent and increase menu prices b. pay the higher rent and leave menu prices unchanged c. pay the higher rent and lower prices d. go out of business e. shut down