How do the consumer and producer surpluses in the monopolistic case differ from those in the competitive case?
What will be an ideal response?
Monopolistic pricing, which sets the price at a level that is higher than the competitive price, increases the size of the producer surplus at the expense of decreasing the size of the consumer surplus. Thus the producer surplus increases in size relative to the consumer surplus. This result however is sub optimal, as the sum of the producer and consumer surpluses is less than it would be in the purely competitive case.
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What is the opportunity cost of government work?
What will be an ideal response?
The most frequently used experimental or observational data in econometrics are of the following type:
A) cross-sectional data. B) randomly generated data. C) time series data. D) panel data.
The short-run market demand curve in perfect competition is positively sloped.
Answer the following statement true (T) or false (F)
According to the rational expectationists
A. even if there were a recession or substantial inflation, the best government policy would be to do nothing. B. the dramatic oil price shocks of 1973 and 1979 created declines in aggregate supply, lowering the natural level of real GDP. C. the prime economic mover is aggregate supply, not aggregate demand. D. All of the choices/statements are true.