The total welfare cost of a monopoly that engages in rent-seeking activities
a. equals only the portion of lost consumer surplus that is not transferred to the monopolist
b. includes the use of resources devoted to rent seeking
c. equals the total reduction in consumer surplus
d. equals the total economic profit earned by the monopolist
e. excludes the use of resources devoted to rent seeking
B
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In the above figure, through which range would the demand for this good be most inelastic?
A) A-B B) B-E C) E-F D) G-H
During the 1965-2009 period, the price index of healthcare services
a. declined slightly relative to the overall consumer price index. b. fell by approximately 50 percent compared to the overall consumer price index. c. increased at twice the rate of the overall consumer price index. d. rose during a brief period following the passage of Medicare and Medicaid but has been relatively stable since that time.
When aggregate demand is too low to ensure full employment, those in favor of using monetary and fiscal policy to stabilize the economy might recommend
a. cutting government spending. b. raising taxes. c. having the Fed purchase government bonds. d. reducing the money supply.
If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that
A) the number of iTunes music downloads would increase. B) there would be no change in the demand for iTunes music downloads. C) the number of iTunes music downloads would decrease. D) iTunes music supply would change but demand would not.