Many people believe that a monopolist can set his own price which consumers have little recourse but to pay, and thereby reap enormous profits. Is this true?
QUESTION 2Which of the following statements concerning the International Monetary Fund is true?
a. The IMF was created to help finance economic development in poor countries.
b. One of the principal aims of the IMF is to discourage international trade and encourage countries to become self-sufficient.
c. The IMF lends money to countries experiencing large balance-of-payments surpluses.
d. When the IMF lends currencies, it always insists on the borrowing country taking action to reduce its balance-of-payments surplus.
e. The IMF obtains funds from annual membership fees charged to member countries.
QUESTION 3Why does rent-seeking behavior lead to deadweight loss?
QUESTION 4Identify the correct statement.
a. A monopolist's pricing decision is limited by the demand for its product.
b. A monopolist is able to choose any price and quantity combination that it desires.
c. A monopolist can increase its profits by increasing price if the demand for its good is relatively elastic.
d. A monopolist does not suffer losses even in the short run.
e. A monopolist is not able to reap positive profits in the long run.
QUESTION 5Which of the following gives consumers an incentive to reduce the consumption of a service when the cost of providing the service is the highest?
a. average cost pricing
b. constant pricing
c. peak load pricing
d. regulated pricing
QUESTION 6The Bretton Woods System of exchange rates was established:
a. to solidify support for the then-existing gold standard.
b. to peg the worldwide price of silver to the price of gold.
c. in Europe before World War II to establish a flexible exchange rate regime.
d. in the United States in 1944 to develop a gold exchange standard.
e. by a mechanism that made gold the reserve currency of the system.
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