A single-price monopoly is ______
A. inefficient because it converts consumer surplus to producer surplus
B. inefficient because it produces too small an output and creates a deadweight loss
C. efficient because buyers are paying a price equal to their willingness to pay
D. efficient because it is the only producer of the good
B The monopoly creates inefficiency by producing less than a competitive market to raise its price.
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If the purchasing power of a dollar is less than the purchasing power of the euro, purchasing power parity would predict that
A) in the long run, interest rates will move to equalize the purchasing power of the dollar and the euro. B) in the short run, interest rates will move to equalize the purchasing power of the dollar and the euro. C) in the short run, exchange rates will move to equalize the purchasing power of the dollar and the euro. D) in the long run, exchange rates will move to equalize the purchasing power of the dollar and the euro.
Economic decline (negative growth) is represented on a production possibilities frontier model by the production possibility frontier
A) shifting inward. B) becoming flatter. C) shifting outward. D) becoming steeper.