Answer the following questions true (T) or false (F)
1. Consumers in a monopolistically competitive market do not receive any consumer surplus because the price paid for the product exceeds the marginal cost of production.
2. Assume that price exceeds average variable cost over the relevant range of demand. If a monopolistically competitive firm is producing at an output where marginal revenue is $111.11 and marginal cost is $118, then to maximize profits the firm should increase its output.
3. A monopolistically competitive firm should lower its price if its marginal revenue exceeds its marginal cost.
1. FALSE
2. FALSE
3. TRUE
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In 2009 in the United States, consumption expenditure was $9,996 billion, investment was $1,559 billion, government expenditures on goods and services were $2,927 billion, and total exports were $1,492 billion. GDP equaled
A) $12,641 billion. B) $10,120 billion. C) $11,488 billion. D) $14,415 billion. E) some amount, but there is not enough information given to calculate GDP.
Refer to Figure 4-18. For each unit sold, the price sellers receive after the tax (net of tax) is
A) $12. B) $8. C) $4.40. D) $3.