The Keynesian model is basically
A) a long-run theory.
B) a short-run theory.
C) a combination of long- and short-run theories.
D) a theory about the economy in both the long run and the short run.
B
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A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q2. By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. What is its profit-maximizing price?
a. $20 b. $15 c. $10 d. $5
If a good has a tax levied on it, sellers respond to the price that excludes the tax and not the price with the tax because
A) the tax is handed over to the state directly by buyers. B) sellers do not get to keep the tax revenue. C) the demand for the good has decreased. D) the quantity supplied of the good increases. E) demanders pay none of the tax.