Under a monopoly, resources are misallocated such that
A) too few resources are used in other industries, and too many are used by the monopoly.
B) too few resources are used by the monopoly, and too many are used elsewhere.
C) resources are being used as efficiently as possible only by the monopoly.
D) consumers are being forced to pay a price below the MC of the monopolist.
Answer: B
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The stock of high-powered money in the economy is $80 billion. The bank reserve-holding ratio is 0.12 and the public wishes to hold 10% of its deposits as cash. The level of bank deposits will be
A) $333 billion. B) $100 billion. C) $250 billion. D) $200 billion.
The demand for a resource will increase if the:
A. Price of the resource decreases B. Supply of the resource decreases C. Price of the product requiring this resource increases D. Price of the product requiring this resource decreases