When the market price is held above the competitive level, the deadweight loss is composed of:
A) producer surplus losses associated with units that used to be traded on the market but are no longer exchanged.
B) consumer surplus losses associated with units that used to be traded on the market but are no longer exchanged.
C) producer and consumer surplus losses associated with units that used to be traded on the market but are no longer exchanged.
D) There is no deadweight loss if the government uses a price floor policy to increase the price.
C
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When you set aside the money you have today in order to purchase goods and services later on, you are using money as a
A) store of value. B) medium of exchange. C) standard of deferred payment. D) unit of accounting.
In the Keynesian consumption function
a. consumption is a constant fraction of income. b. the marginal propensity to consume is constant. c. disposable income determines consumption. d. All of the above e. None of the above
For firms that sell one product in a perfectly competitive market, the market price is:
A. constant, regardless of quantity sold. B. equal to average revenue for a firm. C. equal to marginal revenue for a firm. D. All of these are true.
At a price of $10, the marginal revenue of a monopolist is $6. If the marginal cost of production is $8, what should the monopolist do in order to maximize profits?
A. Increase its price. B. Decrease its price. C. Keep its price at the same level. D. There is not enough information to solve.