Which is a major criticism of a monopoly as a source of allocative inefficiency?
A. A monopolist will always make profits and that means that prices are too high.
B. A monopolist has an unfair advantage because it can purchase labor at a lower price than competitive firms in other industries.
C. A monopolist has no incentive to produce efficiently because even the inefficient monopolist can be assured of economic profits.
D. A monopolist fails to expand output to the level where the consumers' valuation of an additional unit is just equal to the monopolist's opportunity cost.
Answer: D
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Pay as you go financing for the Social Security System was abandoned in 1983
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Figure 10-6
In Figure 10-6, which graph best illustrates an autonomous increase in consumption spending?
a.
(1)
b.
(2)
c.
(3)
d.
(4)