If a monopolist must lower the price on all units in order to sell an additional unit,
a. it is impossible for the monopolist to maximize profit
b. the monopolist will always lose profit when it increases quantity
c. the monopolist will always lose revenue when it increases quantity
d. price will always be greater than marginal revenue
e. price will always be less than marginal revenue
QUESTION 2Compared to the pay increase from just a third year of college, the actual pay increase resulting from a fourth year that results in graduation is
a. several times smaller
b. the same
c. only very slightly greater
d. several times greater
e. No economist has ever studied this issue
QUESTION 3Which of the following is not true with regard to economic profit?
a. economic profit equals total revenue minus total cost
b. economic profit excludes implicit cost
c. economic profit is any profit greater than a normal profit
d. firms attempt to maximize economic profit
e. long-run economic profit is always zero in perfect competition
QUESTION 4Which of the following is true of marginal revenue for a monopolist that charges a single price?
a. P = MR because there are no close substitutes for the monopolist's product.
b. P > MR because the monopolist must decrease price on all units sold in order to sell an additional unit.
c. P < MR because the monopolist must decrease price on all units sold in order to sell an additional unit.
d. AR = MR because there are no close substitutes for the monopolist's product.
e. P = MR only at the profit-maximizing quantity.
QUESTION 5An example of screening job applicants is
a. listing years of education on rsums
b. providing college transcripts
c. sending in letters of recommendation
d. dressing in a suit for interviews
e. checking rsums for spelling and typographical errors
QUESTION 6Economic theory assumes that the goal of firms is to maximize
a. sales
b. total revenue
c. profit
d. price
e. utility
QUESTION 7A profit-maximizing monopolist will always operate where demand is unit elastic.
a. True
b. False
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