Suppose that a perfectly competitive industry becomes a monopoly. What effect will this have on consumer surplus, producer surplus, and deadweight loss?
What will be an ideal response?
If a perfectly competitive industry is monopolized, consumer surplus will decrease, producer surplus will increase, and there will be a deadweight loss.
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Approximately 1 in 12 business firms fail each year in the Unites States.
Answer the following statement true (T) or false (F)
We all use the services of speculators as information in reaching our own economic decisions
A) because speculators are aggressive about marketing the information they produce. B) because we all use prices, which are set by bids and offers based on predictions of the future. C) if we buy or sell commodities through an organized exchange. D) if we play the stock market.
According to your text, controversies about negative externalities are almost always conflicts between the legitimate expectations of citizens and the
A) desire of individuals for greater profits. B) desire of politicians to be reelected. C) legitimate expectations of other citizens. D) mindless urge for more material goods. E) strident demands of environmentalists.
A commercial bank's reserves consist of
A) capital and U.S. Treasury securities. B) vault cash and U.S. Treasury securities. C) vault cash and deposits with the Federal Reserve. D) deposits with the Federal Reserve and U.S. Treasury securities.