Which of the following statements is TRUE about the price that a monopolist charges?
A. The difference between the price charged by a monopolist and a perfect competitor is due to differences in costs.
B. Too much of the good is being produced in a competitive market and not enough is being produced in a monopoly. Due to the way that prices are set.
C. The price is the same as the price that would be charged if there was perfect competition.
D. The value that society places on the last unit produced in a monopoly is greater than its cost.
Answer: D
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If the marginal benefit of a hot dog is greater than its marginal cost, then to increase efficiency,
A) more hot dogs should be produced. B) fewer hot dogs should be produced. C) nothing should be done if the marginal benefit is greater than the marginal cost by the maximum amount because in this case the efficient quantity of hot dogs is being produced. D) production should be halted. E) More information is needed about the price of a hot dog in order to determine if production should be increased, decreased, or not changed.
Answer the following statements true (T) or false (F)
1. As output increases, marginal cost increases, reaches a maximum, and then falls. 2. So long as marginal cost is rising, average variable cost must rise. 3. The principle of diminishing marginal returns is applicable only to the use of labor as a productive resource. 4. The principle of diminishing marginal returns says that as more and more units of a variable resource are added to a set of fixed resources, the resulting additions to output will become increasingly smaller and, eventually, larger. 5. The major factor accounting for dis economies of scale is management inefficiency.
People increase their labor supply in response to a temporary increase in government purchases because
A) current or future taxes will increase, making them financially worse off. B) they need to work more to keep up with their neighbors. C) interest rates will rise, causing a substitution effect. D) higher spending today will lead to higher spending in the future, as well.
Other things the same, as the price level rises,
a. the interest rate rises causing aggregate demand to shift. b. the interest rate rises causing a movement along a given aggregate-demand curve. c. the interest rate falls causing aggregate demand to shift. d. the interest rate falls causing a movement along a given aggregate-demand curve.