The net loss of consumer and producer surplus from underproduction or overproduction is called:
A. government revenue.
B. total surplus.
C. efficiency.
D. deadweight loss.
Answer: D
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The "law of supply" states that, other things remaining the same, firms produce
A) more of a good the less it costs to produce it. B) less of a good the more it costs to produce it. C) more of a good the higher its price. D) less of a good as the required resources become scarcer.
When price is greater than average variable cost but less than average total cost at the profit-maximizing level of output, a firm should:
A) continue to produce the level of output at which marginal revenue equals marginal cost. B) increase output to minimize its losses. C) reduce output to the level at which price equals average variable cost to minimize its losses. D) shutdown to minimize its losses.
Marginal cost pricing regulations for a natural monopolist ensure that
a. b and e b. price reflects the value society places on the last unit produced c. output will continue to grow until the required subsidy is zero d. fair pricing schemes are more profitable e. subsidization will be necessary
The random walk with a trend for the stock market means which of the following?
a. Stock prices are unpredictable on a day to day basis and over time. b. Stock prices have a predictable pattern that investors can determine and use to make profit. c. On any given day stock prices are as likely to increase as decrease but over time prices decrease. d. On any given day stock prices are as likely to increase as decrease but over time prices increase.