Deadweight loss is not the result of:
A. an efficient market.
B. an inefficient market.
C. zero consumer surplus.
D. zero producer surplus.
Answer: A
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If long-run costs are plotted on the vertical axis and quantity of output plotted on the horizontal axis, a positively sloped line implies _____
a. constant returns to scale b. economies of scale c. diseconomies of scale d. an increase in capital-labor ratio e. a decrease in cost-output ratio
What would be the opportunity cost of a child using a coupon for a free ice cream cone?
a. the dollar cost of the cone she selected b. the other types of ice cream she could have selected c. zero - because the good was not a durable good d. zero - because the good was free
Suppose there are only two goods in the world, corn and shirts. If it is true that with its vast resources the United States could produce both more corn and more shirts than Mexico,
a. Mexico will never have a comparative advantage and, thus, can never gain from trading with the United States. b. trade between the United States and Mexico will make the United States better off but will leave Mexico worse off unless the wage of workers in Mexico rises to equal that of American workers. c. total production of corn and shirts cannot be increased through specialization and trade. d. both countries will be able to gain from specialization and trade as long as relative costs of producing the two goods are different in Mexico than in the United States.
Under rent control, tenants can expect
a. lower rent and higher quality housing. b. lower rent and lower quality housing. c. higher rent and a shortage of rental housing. d. higher rent and a surplus of rental housing.