Figure 10-1

At the level of output where the marginal cost and marginal revenue curves intersect, a monopolist's demand curve passes above its average total cost curve. The firm will:

a. be able to make a pure economic profit. b. stay in operation in the short-run, but shut down. c. shut down in the short-run. d. increase its price.

The crowding-out effect of expansionary fiscal policy suggests that:

A. government spending increases at the expense of private investment. B. imports replace domestic production. C. private investment increases at the expense of government spending. D. saving increases at the expense of investment.