The cyclical deficit is that portion of the deficit
a. that results from the economy being below the natural rate of output.
b. that would exist even if the economy were at its natural rate of output.
c. is a function of the level of automatic stabilizers.
d. both a and c.
d. None of the above
D
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In the above figure, if output is 30 units, then the total deadweight loss is
A) $5. B) $10. C) $20. D) $60.
If some industries exhibit increasing returns to scale in each country, we should not expect to see
A) intraindustry trade between countries. B) perfect competition in these industries. C) interindustry trade between countries. D) Either B or C.
Which of the following statements comparing monopoly with competition is correct?
a. A monopolist produces a higher level of output and charges a lower price than a competitive firm would. b. With perfect price discrimination, the total surplus under monopoly can be the same as under competition. c. With or without price discrimination, the consumer surplus under monopoly is at least as large as it would be under competition. d. The deadweight loss associated with monopoly is caused by the positive economic profits of the monopolist; competitive firms do not earn a positive economic profit so there is no deadweight loss under competition.
Opportunity cost:
a. has no relationship to the various alternatives that must be given up when a choice is made in the context of scarcity. b. represents the worst alternative sacrificed for a chosen alternative. c. represents all alternatives not chosen. d. represents the best alternative sacrificed for a chosen alternative.