Too much of society’s scarce resources are used to produce goods in monopoly markets.
Answer the following statement true (T) or false (F)
False
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When economists use the term "big tradeoff" when discussing efficiency they are referring to the tradeoff between
A) external costs and external benefits. B) marginal cost and marginal benefits. C) producer surplus and consumer surplus. D) efficiency and fairness. E) deadweight loss and producer/consumer surplus.
When banks need to borrow funds at the end of the day to meet their legal reserve requirement, they
a. borrow the required funds from the Fed on the federal funds market b. borrow the required funds from other banks on the federal funds market c. ask for extensions on the deadline to meet their requirements, but pay a federal fundsrate as a penalty d. engage in open market operations on the federal funds market e. borrow from the government which reduces the government's public debt
The U.S. government does not allow toggle switches for power windows in automobiles. The National Highway Traffic Safety Administration found that the regulation will save about two children every three years and have negligible costs because the industry will have plenty of time to incorporate new switches into future vehicles. Evaluating this rule in terms of costs and benefits, an economist most likely would conclude that:
A. it is a bad decision because the chances of a child dying (less than one per year) are so small that they can be ignored. B. we cannot tell if it is a good decision without knowing the ages of the children who might be saved by the regulation. C. it fails because it should take effect immediately, not after four years. D. it is a good decision because the benefits exceed the costs.
If three firms of similar sizes join to form a cartel, then it is most likely that
A. all three firms will stop producing. B. they will collectively produce more than before. C. all three firms will earn zero profits. D. they will charge a common, higher market price.