Which is a distortion (a loss of social surplus) associated with a monopolist's inability to observe consumer types when constructing a nonlinear pricing scheme?
a. The monopolist must expend more resources on market research.
b. All bundles involve inefficiently low quantities.
c. Some but not all bundles involve inefficiently low quantities.
d. Quantities aren't distorted, but prices extract too much consumer surplus.
c
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As a result of the recession in 2008, the default risk increased. How did this change affect the loanable funds market?
A) There was a movement up along the supply of loanable funds curve. B) There was a leftward shift in the supply of loanable funds curve. C) There was a movement down along the demand for loanable funds curve. D) There was a rightward shift in the supply of loanable funds curve.
What is the dominant strategy in the prisoner's dilemma?
A) There is no dominant strategy. B) Each prisoner confesses because this is the rational action to pursue. C) Do nothing in the hope that the other prisoner will also do nothing. D) Do not confess because the other prisoner will most likely confess.
With rational expectations, a policy that would increase AD would lead to: a. higher inflation and higher real output in the short run
b. higher inflation and lower real output in the short run. c. higher inflation and an indeterminate effect on real output in the short run, if people's expectations were correct. d. higher inflation and no change in real output, if people's expectations were correct in the short-run.
It is inappropriate and ultimately foolish to respond to the disruptions of international trade by trying to restrict trade through __________ decisions.
a. policy b. political c. consumer d. business