Introduction to Economics

What is a key focus of economics according to the introduction?

• The creation of new currencies

• The study of weather patterns

• The development of new technologies

• The allocation of scarce resources

How do prices function in a competitive market?

• They are irrelevant to consumer choices

• They are set by the government

• They act as messengers between buyers and sellers

• They remain constant regardless of demand

What is a monopoly?

• A market with many competitors

• A market with only government intervention

• A market with a single seller

• A market with no sellers

What is a deadweight loss in the context of monopolies?

• A loss of production efficiency

• A loss of consumer satisfaction due to unmet demand

• A loss of market competition

• A loss of government revenue

Why might a monopolist choose to restrict output?

• To comply with government regulations

• To increase competition

• To maximize profits by keeping prices high

• To reduce production costs

What is the term used to describe the loss of potential gains when a monopoly restricts output and raises prices?

• Deadweight Loss

• Consumer Surplus

• Market Equilibrium

• Price Ceiling

How do monopolies often maintain their market power according to the video?

• Through consumer loyalty programs

• By increasing production

• Through government-supported barriers to entry

• By lowering prices

What is 'rent-seeking' in the context of monopolies?

• The act of reducing production costs

• The effort to gain monopoly power through resource expenditure

• The strategy of diversifying product lines

• The process of setting high prices

Which economic system relies heavily on local government competition to drive growth?

• United States

• India

• Brazil

• China

What challenge do economists face when predicting economic bubbles?

• Lack of historical data

• Inability to measure consumer preferences

• Inaccurate price indices

• Complexity of speculative behavior