Which is a major criticism of a monopoly as a source of allocative inefficiency?
A. A monopolist fails to expand output to the level where the consumers' valuation of an additional unit is just equal to its opportunity cost
B. A monopolist has no incentive to produce efficiently, because even the inefficient monopolist can be assured of economic profits
C. A monopolist will always earns profits and that means that prices are too high
D. A monopolist has an unfair advantage because it can purchase labor at a lower price than competitive firms can
A. A monopolist fails to expand output to the level where the consumers' valuation of an additional unit is just equal to its opportunity cost
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By definition, currency depreciation occurs when the value of
A) all currencies fall relative to gold. B) one currency falls relative to another currency. C) one currency rises relative to another currency. D) gold falls relative to the value of currencies.
Economists argue that unhindered international trade leads to an efficient outcome. What is meant by "an efficient outcome" in this context?
A) an outcome in which wages are roughly equal around the world B) an outcome in which the standard of living is roughly equal around the world C) an outcome in which an individual can choose to specialize in a certain line of work and be certain that he or she can make a living at that until retirement D) an outcome in which resources are devoted to their most efficient use