Which of the following best describes efficiency in the demand and supply model?
a. The economy is receiving as much benefit as possible from its scarce resources and all the possible gains from trade have been achieved.
b. The economy is receiving as much benefit as possible from its scarce resources but not achieving all the possible gains from trade.
c. The economy is not receiving as much benefit as possible from its scarce resources but is getting all the possible gains from trade.
d. The economy is not receiving as much benefit as possible from its scarce resources and not achieving all the possible gains from trade.
a. The economy is receiving as much benefit as possible from its scarce resources and all the possible gains from trade have been achieved.
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In the early 1800s, there was a smallpox outbreak in a remote part of Russia. The government sent in a large group of army doctors, but they were too late to stop the epidemic. Thirty years later, there was another smallpox scare. A local statistician
cautioned the government against a similar response, noting the increased mortality and high number of army doctors during the earlier epidemic. Was the statistician providing good advice?
If a natural monopoly is forced to follow a policy of average-cost pricing, the monopolist will:
A. earn economic profits less than zero. B. charge a higher price than if not regulated. C. charge the same price as if it were not regulated. D. increase output to an amount greater than what it would have produced if it were not regulated.
Money's primary role in the economy comes from the benefits of lowering transactions costs and allowing specialization. This function of money is called
A. standard of deferred payment. B. unit of account. C. store of value. D. medium of exchange.
Refer to the information provided in Table 13.1 below to answer the question(s) that follow. Table 13.1Price ($)Quantity4.002,0003.502,4003.002,8002.503,2002.003,6001.504,0001.004,400Refer to Table 13.1. If a monopoly faces the demand schedule given in the table and has a constant marginal and average cost of $1 per unit of providing the product, what is the maximum profit the monopoly can earn?
A. $4,800 B. $5,600 C. $6,000 D. $8,400