Sarah's demand curve for whiskey has the same slope as Pete's; however, it lies to the right of Pete's. An increase in the price of whiskey will cause
A) Sarah to incur a greater loss of consumer surplus than Pete will.
B) Pete to incur a greater loss of consumer surplus than Sarah will.
C) Sarah and Pete to incur the same loss of consumer surplus.
D) Sarah's demand curve to shift closer to Pete's.
A
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If a firm has a monopoly in both the production and distribution of a product and the managers of both the production and distribution divisions maximize profits, all of the following are true except which one?
A) A successive monopoly will occur within the firm. B) The firm will maximize its total profit. C) The manager of one of the divisions should be instructed to maximize profit and the manager of the other division should be instructed to operate as a perfectly competitive firm. D) Double marginalization will occur within the firm.
In a market that is contestable, but has only a few sellers, the
a. threat of new entrants will prevent prices from rising above the competitive level. b. producers will be able to charge prices that are high enough to produce long-run economic profits. c. producers will not face new competition because the barriers to entry are high. d. market will never be expected to come close to the competitive result.
Some economists have criticized standard government figures on income inequality, arguing that these data:
A. exclude households whose earnings arise in the public sector. B. conceal the strong trend toward greater equality in household sizes. C. conceal the growth of poverty due to a growing number of discouraged workers. D. overstate the degree of income inequality by failing to include noncash transfers as income.
The amount of income that households actually receive before they pay personal income taxes defines
A. disposable personal income (DPI). B. national income (NI). C. personal income (PI). D. net domestic product (NDP).