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- A.the profit maximizing output level for monopolists occurs at lower levels of production than for purely competitive firms
- B.monopolists maximize profits by setting output such that marginal revenue exceeds marginal cost
- C.monopolists maximize profits by setting output such that marginal revenue is maximized
- A.Both the elasticities and absorption approaches consider trade and capital flows
- B.Under the elasticities approach, currency depreciation will result in greater improvement in the trade deficit when either import or export demand becomes more elastic
- C.Under the absorption approach, depreciation of the domestic currency will improve a trade deficit if it increases national expenditures relative to income
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An economist finds the following characteristics for the market for two products, S and T:
Product
Firm s Pricing Power
Concentration Ratio
S
Considerable
High
T
Some
Low
- A.an oligopoly and the industry for Product T is also an oligopoly.
- B.an oligopoly and the industry for Product T is monopolistic competition.
- C.monopolistic competition and the industry for product T is an oligopoly.
- A.marginal product per unit of labor is 1/3 ton.
- B.marginal revenue product of capital is equal to the price of a unit of capital.
- C.ratio of the marginal output per labor unit to labor units employed is at a maximum.
- A.perfectly elastic, meaning elasticity of supply is infinite
- B.perfectly inelastic, meaning elasticity of supply is zero
- C.perfectly inelastic, meaning elasticity of supply is infinite
- A.producer surplus for domestic producers of the good
- B.quantity of the good supplied by domestic producers
- C.quantity of the good demanded in the domestic market
- A.AVC and ATC are at their minimum points
- B.AVC is at its minimum point and ATC is increasing
- C.ATC is at its minimum point and AVC is decreasing
- A.P-0.04Q + 0.75.
- B.P = 0.0042Q + 0.9.
- C.P = 0.18Q + 1.32.
- A.positive, and for substitutes the cross elasticity of demand is negative
- B.negative, and for substitutes the cross elasticity of demand is negative
- C.negative, and for substitutes the cross elasticity of demand is positive
- A.adopt a marginal cost pricing strategy, which will decrease consumer surplus.
- B.increase price, decrease consumer surplus, and increase producer surplus.
- C.reduce output, create a deadweight loss, and decrease both producer and consumer surplus.
