The consumer surplus lost because monopolists restrict the production of output represents a welfare loss because:
a. it is transferred to producers in the form of profit
b. consumers pay a higher price than they would in a more competitive market.
c. society is not using its scarce resources in the best way possible.
d. of both a. and b., but not c.
c
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In a market system, self-interest motivates most people to
A) remain self-sufficient. B) avoid paying insurance premiums. C) provide products for other people. D) rely on government central planning.
Define the following terms and explain their importance to the study of macroeconomics
a. the relationship between interest rates and velocity b. lags in stabilization policy c. rules versus discretion
Which measurement is most useful for comparing the standard of living in different countries?
A. The growth rate of real GDP. B. GDP per capita. C. GDP per worker. D. The growth rate of the labor force.
Which of the following does not describe a characteristic of short-term economic fluctuations?
A. Expansions and recessions are irregular in length and severity. B. Expansions and recessions are felt in only a few sectors of the economy. C. Durable-goods industries are more sensitive to short-term fluctuations than service and non-durable industries. D. The unemployment rate rises during recessions.