Under a monopoly, resources are misallocated such that
A) too few resources are used in other industries, and too many are used by the monopoly.
B) too few resources are used by the monopoly, and too many are used elsewhere.
C) resources are being used as efficiently as possible only by the monopoly.
D) consumers are being forced to pay a price below the MC of the monopolist.
Answer: B
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If prices of both horizontal and vertical goods increase by 50%,
A) budget constraint will be unchanged. B) slope of the budget constraint stay the same. C) slope of the budget constraint will decrease. D) budget constraint will shift outward in a parallel fashion.
Other things being equal, a decrease in the price of ethanol will
A. decrease the use of corn in ethanol production but increase the use of corn in HFCS (another product produced from corn). B. decrease the use of corn in ethanol production and in HFCS. C. decrease the use of corn in all corn uses. D. increase the use of corn in HFCS.
The aggregate demand curve shows the:
a. Direct relationship between the price level and real GDP produced b. Inverse relationship between interest rates and real GDP produced c. Inverse relationship between the price level and real GDP purchased d. Direct relationship between real-balances and real GDP purchased
If the demand for a good is perfectly elastic, the price elasticity of demand is ________ and the demand curve is ________
A) infinite; vertical B) zero; vertical C) zero; horizontal D) infinite; horizontal