In the figure above, the deadweight loss when the market is a single-price monopoly rather than perfectly competitive is the area of
A) triangle aeb.
B) triangle aic.
C) triangle eig.
D) triangle eif.
C
You might also like to view...
Demand-pull inflationary pressure increases as the economy approaches full employment
a. True b. False Indicate whether the statement is true or false
Producer surplus from a unit of output is the difference between the market price and the seller's cost of producing that unit
a. True b. False Indicate whether the statement is true or false
If Taiwanese workers can produce all goods at lower wages than American workers, then
A. Americans can still gain by trading with Taiwan. B. Americans can only lose if they import from Taiwan. C. Taiwan can only lose if it trades with America. D. there are no gains from trade that are possible in this case. E. Americans should be self-sufficient.
For this question, assume that equilibrium output is determined in the ZZ-Y diagram. Further assume that policy makers' goals are (1 ) to achieve balanced trade (i.e., NX = 0); and (2 ) to achieve a target level of output, say YT. Now, suppose that the initial level of equilibrium output is equal to YT (i.e., Y = YT) and that a trade deficit exists at this initial level of output. Which of the
following policy actions would most likely enable the policy makers to achieve their two goals simultaneously? A) a reduction in government spending B) convince the country's trading partners to pursue policies that will cause an increase in foreign income (Y) C) a reduction in the real exchange rate D) a reduction in taxes E) a simultaneous increase in government spending and reduction in the real exchange rate F) none of the above