Because a monopoly ignores external costs, it is possible that it will
A) produce the socially optimal quantity of a good.
B) produce more than the socially optimal quantity of a good.
C) produce less than the socially optimal quantity of a good.
D) All of the above.
D
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Textbook examples of trade between two nations are simplified in order to show how two nations both benefit from trade. These examples are misleading because
A) in the real world, rich countries can take advantage of poor countries. B) they do not account for the reduction in wages that occurs in both countries as a result of trade. C) some individuals in both countries may be made worse off because of trade. D) trade restrictions are likely to be imposed as trade grows over time.
Refer to the accompanying figure. As Jeff watches more movies, his marginal utility:
A. gets close to one B. does not change C. gets smaller D. gets larger