When a rent-seeking equilibrium is reached, the
A) economic profit is maximized.
B) economic profit is eliminated by legislation.
C) economic profit is eliminated.
D) consumer surplus is greater than without rent seeking.
E) consumer surplus is eliminated.
C
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A member of a cartel like OPEC has an incentive to
A) argue for larger production quotas for each member of the cartel. B) agree to a low cartel production level and then produce more than its quota. C) abide by its individual production quota. D) support equal production quotas for each member.
The money supply has decreased from $2.75 trillion to $2.25 trillion. Which of the following could have caused this increase?
A. The Fed purchased government securities from the public. B. The Fed decreased the discount rate. C. Consumers who were holding money within the banking system withdrew this money. D. Commercial banks decide to hold fewer excess reserves.