What is the drawback of forcing a natural monopolist to use a marginal cost pricing rule?
A) No deadweight loss is eliminated.
B) The firm will incur an economic loss.
C) The gain in consumer surplus will be less than the loss in producer surplus, thus creating additional deadweight loss.
D) None of the above answers is correct.
B
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If Americans expect the dollar price of the British pound to rise, this expectation will cause
a. a rightward movement along the U.S. demand curve for pounds b. a leftward shift of the U.S. demand curve for pounds c. a rightward shift the U.S. demand curve for pounds d. a leftward movement along the U.S. demand curve for pounds e. no change in the U.S. demand curve for pounds
The vertical axis for an aggregate demand curve measures
A. real Gross Domestic Product? (GDP). B. quantity demanded of the representative good. C. the interest rate. D. the price level.
Ch 1.The fallacy of composition is the incorrect view that
What will be an ideal response?
A shift from D1 to D2 causes equilibrium price to __________ and quantity to __________.
A. rise; rise
B. fall; fall
C. rise; fall
D. fall; rise