If the government requires a natural monopoly to price at marginal cost,
a. monopoly firms will earn zero economic profits because the price of the good equals the cost of producing that good.
b. monopoly firms will operate at a loss because P < AC.
c. more firms will be able to enter the market.
d. producer surplus will increase because quantity supplied is greater.
b
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Along the short-run supply curve (SRAS), a decrease in the aggregate demand curve will decrease: a. both the price level and real GDP
b. real GDP without raising the price level. c. the price level without affecting real GDP. d. the price level but reduce real GDP.
The annual percentage increase in the purchasing power of a financial asset is called the:
A. inflation rate. B. real rate of return. C. nominal interest rate. D. real interest rate.
The Soviet Union consistently increased the amount of capital available to its workers, but found that increases in capital resulted in progressively smaller and smaller increases in GDP per worker. This phenomenon is referred to as
A) diminishing returns to capital. B) a rising standard of living. C) new growth theory. D) a shift of the per-worker production function.
When is an individual said to have single-peaked policy preferences?
What will be an ideal response?