What does the deadweight loss from monopoly measure?
What will be an ideal response?
The deadweight loss from monopoly measures the loss to society of having a product produced by a monopoly rather than a perfectly competitive industry. The deadweight loss results from the point that a monopolist produces less output than would a perfectly competitive industry. The monopolist produces less output in order to raise the price of the product and thereby earn an economic profit.
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If Coke and Pepsi are close substitutes, then if:
a. Coke raises its price, so will Pepsi. b. Coke raises its price, it will not lose customers to Pepsi. c. Pepsi lowers its price, it will not hurt Coke. d. Pepsi lowers its price, so will Coke. e. Coke raises its price, some customers will switch to Pepsi.
Studies show that the supply curve for bananas has shifted. All of the following could be possible explanations for the shift, except one. Which is the exception?
a. The price of land for growing bananas has risen. b. Weather conditions in banana-growing countries have worsened. c. The price of apples has fallen. d. The price of bananas has risen. e. The salaries paid to banana growers has risen.
Suppose the equilibrium level of national income is $800 billion and the MPC is 0.8 . Suppose as well that people decide to increase their saving by $30 billion. Before this change, people intended to save $100 billion and producers intended to invest $100 billion. The new equilibrium level of national income is
a. $600 billion b. $650 billion c. $680 billion d. $730 billion e. $800 billion
Does GDP for a particular year include items produced in a previous year?
a. Nominal GDP will not and real GDP will b. Real GDP will and nominal GDP will not c. Yes for both nominal and real GDP d. No for both nominal and real GDP