A monopoly misallocates resources when it
A) restricts output so that the marginal benefit of the last unit sold exceeds the marginal social cost of producing the good.
B) makes an above-normal profit.
C) sells the same product to different groups of customers at different prices.
D) exploits scale economies.
Answer: A
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If there was a positive technological shock which increased the demand for labor, then
A) imports would increase. B) GDP would decrease. C) GDP would increase. D) imports would decrease.
In the case of a beneficial externality
a. marginal private cost is below marginal social cost. b. marginal social cost is above marginal private cost. c. marginal social cost and marginal private cost are equal. d. the free market price is below the socially efficient price.
Suppose we know that a monopolist is maximizing its profits. Which of the following is a correct inference? The monopolist has
A. maximized its total revenue. B. set price equal to its average cost. C. equated marginal revenue and marginal cost. D. maximized the difference between marginal revenue and marginal cost.
The other checkable deposits component of the M1 measure reported by the Federal Reserve includes
A) negotiable time deposits. B) money market mutual fund shares. C) automatic transfer from savings accounts. D) money market deposit accounts.