A monopsony is
A) a market in which there is only one producer of a good or service.
B) a market in which there is only one producer and one consumer of a good or service.
C) a market in which there is only one buyer of a good or service.
D) a temporary situation in labor markets when prices are adjusted through the use of collective bargaining.
C
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Suppose a tax of $5 per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from 200 units to 100 units. The tax decreases consumer surplus by $450 and decreases producer surplus by $300 . The deadweight loss from the tax is
a. $250. b. $500. c. $750. d. $1,000.
Caroline earns more than John. Under a new tax system, some of the taxes paid by Caroline would go to John. A libertarian would
a. support the system because an extra dollar earned by Caroline would be worth less to her than an extra dollar given to John. b. oppose the system if it redistributed income in the presence of equal opportunity. c. oppose the system because an extra dollar earned by Caroline would be worth more to her than an extra dollar given to John. d. support the system if it maximized the well-being of the poorest member of society.