The existence of a deadweight loss associated with a monopoly can be seen because
A) consumers are willing to pay more for the last unit of output than it costs to produce.
B) the cost of the last unit produced is more than consumers are willing to pay for it.
C) the producer surplus is larger than in a competitive market.
D) None of the above.
A
You might also like to view...
Government spending affects aggregate demand directly, and tax changes affect aggregate demand indirectly. Therefore, changes in
a. taxes are ineffective in changing aggregate demand. b. government spending affect aggregate demand more quickly than changes in taxes. c. taxes are virtually useless as a stabilization tool. d. government spending should be used with great caution.
Last year, the currency-deposit ratio was 0.2 and the reserve-deposit ratio was 0.2. Over the past year, the public changed its currency-deposit ratio, to which the Fed responded by reducing the reserve-deposit ratio to 0.15, to keep the money supply from changing and keeping the same monetary base. Calculate the new currency-deposit ratio. Show your work.
What will be an ideal response?