If marginal cost is constant, what happens to a market if it alters from perfect competition to monopoly without any change in the position of the market demand curve or any variation in costs?
A. Consumer surplus is eliminated, and an equal-sized deadweight loss is created.
B. Consumer surplus increases, and the previously existing deadweight loss decreases.
C. Consumer surplus increases, and the previously existing deadweight loss increases.
D. Consumer surplus decreases in size, and a deadweight loss is created.
Answer: D
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One source of the supply of dollars in the foreign exchange market is
A) U.S. companies importing foreign goods. B) foreign citizens buying U.S. goods. C) SDRs being converted into dollars. D) the U.S. Mint buying dollars from the Bank of England.
In the short run, certain costs, such as rent on land and equipment, must be paid whether or not any output is produced. These are:
a. the firm's variable costs. b. the firm's break-even costs. c. the firm's sunk costs. d. the firm's marginal costs. e. the firm's fixed costs.
Refer to the table shown. In trillions of dollarsConsumption3.5Investment1.2Government Purchases1.8Exports0.6Imports0.4What is the economy's GDP?
A. $7.1 trillion B. $6.7 trillion C. $6.5 trillion D. $6.1 trillion
Suppose nominal interest rates in the U.S. rise from 4.6% to 5% and decline in Britain from 6% to 5.5%, while U.S. consumer inflation remains unchanged at 1.9% and British inflation declines from 4% to 3%. In addition suppose, real growth in the U.S. is
forecasted for next year at 4% and in Britain real growth is forecasted at 5%. Finally, suppose producer price inflation in the U.S. is declining from 2% to 1% while in Britain producer price inflation is rising from 2% to 3.2%. Explain what effect each of these factors would have on the long-term trend exchange rate ( per $) and why?