Refer to Figure 15-11. What is the size of the deadweight loss prior to Verizon entering the market and what happens to this deadweight loss after Verizon does enter the market?
A) The deadweight loss of area C+D is converted to consumer surplus
B) The total deadweight loss is the area D+F; D is converted to consumer surplus and F to producer surplus.
C) The deadweight loss of area D is converted to consumer surplus.
D) The deadweight loss of area D is converted to producer surplus.
C
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If capital gains equal zero, then the Ng family's wealth at the end of the year equals their wealth at the beginning of the year
A) plus consumption minus income. B) plus income. C) plus saving. D) minus personal income taxes. E) minus consumption.
If you were a Keynesian economist, you would believe that the economy
a. will always move toward full-employment real GDP b. has a tendency to generate inflation regardless of whether it's at full employment real GDP or not c. will decrease unemployment by lowering wage rates until the labor market is in equilibrium d. is driven by the supply-side of the market e. may be in equilibrium at less than full employment
When the money market is drawn with the value of money on the vertical axis, an increase in the money supply causes the equilibrium value of money
a. and equilibrium quantity of money to increase. b. and equilibrium quantity of money to decrease. c. to increase, while the equilibrium quantity of money decreases. d. to decrease, while the equilibrium quantity of money increases.
Suppose a recession in Europe reduces U.S. net exports at every price level. Which of the following would you expect to occur in the U.S. as a result of this change?
a. In the short run, unemployment will increase and inflation will fall. b. In the short run, unemployment will increase and inflation will rise. c. In the short run, unemployment will decrease and inflation will rise. d. In the short run, unemployment will decrease and inflation will fall.