Which of the following is true for BOTH monopoly and a perfectly competitive firm?
A) The demand for the individual firm's product is perfectly elastic.
B) Economic profits can be sustained indefinitely over time.
C) The marginal revenue curve is horizontal at the market equilibrium price.
D) Profits are maximized by producing at the level of output where marginal revenue is equal to marginal cost.
D
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Which of the following is most likely to cause the dollar to depreciate?
a. higher domestic interest rates b. an increase in the rate of inflation abroad c. a shift by the Fed to a more expansionary monetary policy d. a decrease in foreign interest rates
Consternation Corporation has an agreement with its workers to index completely the wage of its employees using the CPI. Consternation Corporation currently pays its production line workers $8.00 an hour and is scheduled to index their wages today. If the CPI is currently 160 and was 128 a year ago, the firm should increase the hourly wages of its workers by
a. $0.25. b. $1.60. c. $2.00. d. $2.56.