The monopolist's marginal revenue is less than price since
A) additional units can only be sold if the price is lowered on all units sold.
B) the demand function is horizontal.
C) average revenue is also less than price.
D) average total cost is declining.
Answer: A
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What is the great advantage of adjudication over legislation in the management of negative externalities?
A) Adjudication has lower costs. B) Adjudication maintains the continuity of expectations. C) Courts are bound by the rule of law and legislatures are not. D) Courts can act more quickly than legislatures. E) There are no clear answers in such cases.
When an economy experiences a one-time increase in productivity, there is an increase in the long-run, steady state value of ________
A) the growth rate of output B) the depreciation rate C) consumption per worker D) the saving rate