Which of the following is inconsistent with monopoly?
a. a single seller
b. economies of scale
c. free entry and exit
d. selling in the elastic portion of the demand curve in order to maximize profits
Ans: c. free entry and exit
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A local flower grower grows products in a plot of land, which is exceptionally colorful and is admired by many passersby. There is no way to charge for this in the price of the flowers. We can safely conclude that
A. the florist produces too many flowers. B. the florist produces too few flowers. C. the florist produces the right amount of flowers. D. society pays the socially optimal amount for the flowers.
At its long-run equilibrium level of output, the demand curve facing an individual perfectly competitive firm is tangent to its
A. total economic profit curve. B. long-run average cost curve. C. marginal cost curve. D. marginal profit curve.
The Federal Reserve System is a(n)
A. corporation owned by its member banks. B. independent branch of the U.S. government. C. corporation owned by the government and member banks. D. agency created by presidential executive order.
Assuming an upward-sloping AS curve, if an economy is at full employment and consumption spending decreases while all other levels of spending remaining constant, then
A. Changes in consumption spending have no impact on GDP. B. Inventory levels are less than desired until a new equilibrium is reached. C. Increased unemployment results. D. Any GDP gap disappears.