Economists criticize monopolies because monopolies
A) always price discriminate.
B) receive accounting profits.
C) restrict output and raise prices compared to a competitive situation.
D) make consumers pay more for their product than the customers value the product.
Answer: C
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Historical evidence seems to indicate that
A) budget and trade deficits generally move in the same direction. B) budget and trade deficits generally move in the opposite direction. C) trade and budget deficits decrease when the president is a Republican, and increase when the president is a Democrat. D) there is no consistent relationship between trade and budget deficits.
Suppose a chemical plant regularly dumps chemicals into a river that must be cleaned up before farmers located downstream can use the water on their crops
Dumping the chemicals into the river saves the chemical plant $750,000 in yearly disposal costs and cleaning the water costs farmers $825,000 each year. Explain what the benevolent social planner would like to see happen in this case.