Which of the following markets will have the largest deadweight loss?
A) A market that consists of perfectly competitive firms.
B) A market that consists of a single-price monopoly.
C) A market that consists of a perfect price discriminating monopoly.
D) None of the above. There is no deadweight loss as long as firms produce at the level of output where marginal revenue equals marginal cost.
B
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Which of the following macroeconomic variables is most dependent on whether the government pursues an active approach to policy or a passive approach to policy?
a. Aggregate supply b. Aggregate demand c. Money demand d. Money supply e. Interest rate
Which of the following factors would be most likely to encourage capital formation in a less-developed nation?
What will be an ideal response?
Ceteris paribus, based on the circular flow model, a spending injection results in:
A. A decrease in total income for consumers. B. An increase in total income for consumers. C. An increase in the MPS. D. A decrease in the MPS.