For a profit-maximizing monopolist, the price of a product is:
a. always equal to marginal revenue
b. always greater than marginal revenue.
c. always less than marginal revenue.
d. always equal to the average total cost of production.
b
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The cost of producing cigarettes in the United States has increased and at the same time, more and more Americans are choosing to not smoke cigarettes. Which of the following best explains the effect of these events in the cigarette market?
A) Both the supply and demand curves have shifted to the left. As a result, there has been a decrease in the equilibrium quantity and an uncertain effect on the equilibrium price. B) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. C) The supply curve has shifted to the right and the demand curve has shifted to the left. As a result there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. D) The supply curve has shifted to the right and the demand curve has shifted to the left. As a result, there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity.
For the United States, there is somewhat conflicting evidence whether or not the inflation rate has a unit autoregressive root
For example, for the sample period 1962:I to 1999:IV using the ADF statistic, you cannot reject at the 5% significance level that inflation contains a stochastic trend. However the null hypothesis can be rejected at the 10% significance level. The DF-GLS test rejects the null hypothesis at the five percent level. This result turns out to be sensitive to the number of lags chosen and the sample period. (a) Somewhat intrigued by these findings, you decide to repeat the exercise using Canadian data. Letting the AIC choose the lag length of the ADF regression, which turns out to be three, the ADF statistic is (-1.91). What is your decision regarding the null hypothesis? (b) You also calculate the DF-GLS statistic, which turns out to be (-1.23). Can you reject the null hypothesis in this case? (c) Is it possible for the two test statistics to yield different answers and if so, why? What will be an ideal response?