Monopolists earn excessive profits by increasing their quantity produced above the competitive market outcome.
Answer the following statement true (T) or false (F)
False
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A negative externality exists when
A. a person's or group's actions cause a benefit that is felt by others. B. a person's or group's actions cause a cost that is felt by others. C. market output is less than socially optimal output. D. a and c E. b and c
The market where banks borrow from other banks for short periods of time is the:
a. discount market. b. federal funds market. c. inter-bank loan market. d. national bank market. e. liquidity market.
The percent change in the quantity of one commodity demanded divided by the percent change in the price of another commodity is the
a. price elasticity of demand b. price elasticity of supply c. income elasticity of demand d. income elasticity of supply e. cross-price elasticity of demand
If Tim insures his car against theft, it will
A. have no effect on the likelihood that his car will be stolen. B. decrease his incentive to prevent his car from being stolen. C. decrease the likelihood that his car will be stolen. D. increase his incentive to prevent his car from being stolen.