If a profit-maximizing monopolist finds that marginal cost is increasing and exceeds marginal revenue, it should:
a. increase output and decrease price.
b. increase price and decrease output.
c. decrease both price and output.
d. increase both price and output.
QUESTION 2How is the optimal level of input usage to produce a certain output identified with the help of isocosts and isoquants?
QUESTION 3Which of the following probably best explains why trade restrictions are imposed even if the costs to consumers are greater than the benefits to protected industries?
a. Indifference on the government's part to the interests of domestic workers
b. A desire to make other countries suffer
c. Government's desire to earn high revenues
d. Successful lobbying by employers and workers in protected industries
e. Government's preference to safeguard the interest of the producers at the expense of the consumers
QUESTION 4The minimum point of the _____ curve is called the shutdown price.
a. average-fixed-cost
b. marginal cost
c. average -total-cost
d. total fixed cost
e. average-variable-cost
QUESTION 5If marginal revenue on the tenth unit of output equals 4 for a non-discriminating, profit-maximizing monopolist, then price:
a. equals 4.
b. is less than 4.
c. is greater than 4.
d. must be equal to average total cost.
QUESTION 6Employers and workers in the protected industry know that the consequences of protection are principally:
a. lower prices for their output, lower profits for owners, and lower wages for workers.
b. higher prices for their output, lower profits for owners, and lower wages for workers.
c. higher prices for their output, lower profits for owners, and higher wages for workers.
d. lower prices for their output, higher profits for owners, and higher wages for workers.
e. higher prices for their output, higher profits for owners, and higher wages for workers.
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