Suppose an industry initially had been perfectly competitive and then became a monopoly. Which of the following would occur?
a. Consumer surplus would decrease.
b. Consumer surplus would increase.
c. Producer surplus would decrease.
d. The deadweight loss would be eliminated.
Ans: a. Consumer surplus would decrease.
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Assume that an individual with an opportunity cost of time of $20 per hour has to choose between renting four apartments. The rents of the four apartments and the individual's monthly commuting time to work are shown in the following table
Calculate the direct cost, indirect cost, and total cost that the individual will incur if she rents any of these apartments. Also, determine the apartment that is optimum for the individual. Graph the total cost involved for the various choices. Apartment Monthly Commuting Time (hours) Rent ($) 1 60 2,800 2 90 2,200 3 120 1,500 4 150 1,400
Which point in the figure above is an attainable combination that would have unemployed resources?
A) point A B) point B C) point C D) point D E) point A and point B
When comparing the velocity of M2 (V2), with the velocity of M1 (V1), the evidence suggests that V2 has been __________ and V1 has been __________ over time
A) relatively predictable; relatively predictable B) relatively predictable; relatively unpredictable C) relatively unpredictable; relatively predictable D) relatively unpredictable; relatively unpredictable
The reason people in Professor Rawls' thought experiment would choose an equal distribution of income is that:
A. people are risk-neutral. B. it is the easiest distribution to implement. C. they are concerned about the welfare of others. D. they fear ending up in a disadvantaged position themselves.