What is deadweight loss? When is deadweight loss equal to zero?
What will be an ideal response?
Deadweight loss is the reduction in economic surplus resulting from a market not being in competitive equilibrium. Deadweight loss is equal to zero when the sum of consumer surplus and producer surplus is maximized, which occurs when the market is in competitive equilibrium.
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"Since checking accounts now pay interest they should not be included in the money supply." Given that checks are the major medium of exchange, this statement is false because
A) checking accounts are primarily used for savings in the current year. B) the interest rate on checking accounts is lower than on other accounts. C) the demand for real balances is negatively related to interest rates. D) money is money.
In long-run equilibrium, a perfectly competitive firms produces at the output level at which: a. total revenue is maximized
b. long-run marginal cost is minimized. c. average total cost is minimized. d. short-run variable cost is minimized.
A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.
________ is called an implicit cost, while ________ is called an explicit cost
A) An accounting cost; an economic cost B) A nonmonetary opportunity cost; a cost that involves spending money C) A production cost; a sales cost D) An actual cost; a hypothetical cost