"The deadweight loss of a monopoly equals the monopoly firm's profits." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. The deadweight loss from a monopoly is the portion of consumer surplus loss that no one in society can obtain. The monopoly firm's profits represent a transfer of consumer surplus away from consumers to the monopolist, and so profits are not a deadweight loss.
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If the demand for good A is more elastic than the demand for good B, a small increase in supply in both markets will cause
a. a much greater increase in the equilibrium quantity of good A than for good B b. a much greater increase in the equilibrium quantity of good B than for good A c. the equilibrium quantity will decrease by the same amount in both markets d. only the equilibrium quantity of good B will decrease e. only the equilibrium quantity of good A will decrease
From 1979 to 2011, which country had the highest growth rate of GDP per hour of work?
a. Singapore b. United Kingdom c. France d. Japan
The behavior of exchange rates during the period 1999-2004 ___ predictable based on the short run asset model if we assume that changes in the money supply were assumed to be ____
a. was not; temporary b. was; temporary c. was not; permanent d. was; permanent
Explain the differences between the two-country, two-commodity model with constant costs of production and the two-country, two-commodity model with increasing costs of production. Adequately describe the production-possibilities curves for each country in each case. Describe free-trade production and the degree of specialization in each country under both cost situations.
What will be an ideal response?