Assume that an oligopolist has a kinked demand curve. Suppose that the marginal cost curve passes through the gap in the marginal revenue curve. This means price and output will be shown by a point:
A. above the curve.
B. below the curve.
C. at the kink.
D. on the upper part of the curve.
Answer: C
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Your opportunity cost of attending a lecture on the number of brain cells lost by binge-watching episodes of Here Comes Honey Boo Boo is
A) zero, since you already know that binge-watching will kill all of your brain cells. B) the price of the ticket for the lecture. C) the value of attending a meditation class, which is your next-best alternative. D) the total value of all other options you could have chosen instead of going to the lecture.
A minimum wage law that sets the minimum below the equilibrium wage rate will
a. create unemployment b. have no effect on employment c. increase employment d. raise the equilibrium wage rate e. lower the equilibrium wage rate