For an economist to say that too little of the good is produced, what must be true?
A. The consumer surplus plus the producer surplus must be smaller than it could be.
B. The producer surplus must be smaller than optimal.
C. The consumer surplus must be larger than optimal.
D. The consumer surplus must be smaller than optimal.
Answer: A
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Ceteris paribus, deficit spending results in higher interest rates, which can
A) ultimately have a positive impact on productivity gains and society's standard of living. B) accelerate growth in investment spending. C) crowd out private investment. D) increase the wealth of future generations.
An increase in output due to either a positive supply or demand shock to production will lead to ________
A) an increase in the demand for labor and higher real wages B) a decrease in the demand for labor and higher real wages C) an increase in the demand for labor and lower real wages D) a decrease in the demand for labor and lower real wages
In the permanent-income hypothesis incorporating rational expectations, the actual cyclical pattern of consumption in the United States is too ________ to justify the assumption that a current change in income ________
A) smooth, is a poor guide to future income changes B) volatile, is a poor guide to future income changes C) smooth, leads to a gradual change in permanent income D) volatile, leads to a gradual change in permanent income
For a nondiscriminating monopolist, which of the following statements is true?
a. Unlike a firm in perfect competition, a monopolist produces where MR > MC. b. The monopolist's marginal revenue curve is the same as its demand curve. c. The monopolist will always produce in the inelastic range of its demand curve. d. The monopolist does not have a supply curve. e. The monopolist produces where MR < MC.