The consumer surplus lost because monopolists restrict the production of output represents a welfare loss because:
a. it is transferred to producers in the form of profit
b. consumers pay a higher price than they would in a more competitive market.
c. society is not using its scarce resources in the best way possible.
d. of both a. and b., but not c.
c
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A government may view with favor its country's importing more than it exports provided that the
a. exports are to the countries from which it imports b. imports are luxuries that have little effect on the economy c. imports are capital goods such as machinery that will be used to create future exports d. balance of payments still nets out to zero e. countries exporting to it are willing to increase their tariffs to restore balance
For a long while, electricity producers were thought to be a classic example of a natural monopoly. People held this view because
a. the average cost of producing units of electricity by one producer in a specific region was lower than if the same quantity were produced by two or more producers in the same region. b. the average cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more produced in the same region. c. the marginal cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more producers in the same region. d. electricity is a special non-excludable good that could never be sold in a competitive market.