What occurs when it is impossible to improve the situation of one party without imposing a cost on another?
a. efficiency
b. consumer surplus
c. social surplus
d. deadweight loss
a. efficiency
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The long-run equilibrium of monopolistic competition is characterized by
A) P = MC = ATC. B) P = MC > ATC. C) P = MR = MC. D) P = ATC > MC.
A consequence of a publicly owned natural monopoly is:
A. the loss of the profit motive. B. an increase in the motivation to improve efficiency. C. increased public pressure to reduce costs. D. reduced chance to remain open longer than political terms of office.
Which of the following Fed actions will decrease the money supply?
A) an open market purchase of Treasury bills B) an increase in the required reserve ratio C) a decrease in the discount rate relative to the federal funds rate D) all of the above E) none of the above
Assume a firm is run as a zero-profit enterprise. Which of the following would be TRUE?
A) There is a higher probability that wage reductions would outweigh layoffs. B) Those in charge would not act any different than regular owners, there would still be layoffs. C) Those not in charge would remain risk neutral. D) Wage reductions would be lower than they would be if the firm was run for profit.