Which of the following distinguishes a natural monopoly from monopoly caused by ownership of a vital resource?
A. The natural monopoly has a marginal cost curve above its average cost curve at all levels of output, and the marginal cost in other monopolies is also above average cost.
B. The natural monopoly does not require any government intervention because it is only efficient to have one large firm supplying the market, but other monopolies do require government intervention to maintain efficiency.
C. The natural monopoly has a downward-sloping long-run average cost curve as opposed to a U-shaped long-run average cost curve.
D. The natural monopoly occurs with naturally occurring products like gold and diamonds, whereas other monopolies occur with man-made products.
Answer: C
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In the foreign exchange market, how does a fall in the U.S. interest rate affect the supply of dollars?
What will be an ideal response?
The aggregate demand curve tends to be
a. vertical. b. horizontal. c. upward sloping. d. downward sloping.
An increase in land rents
A. will bring some previously zero-rent land into productive use. B. will lead to land to be used less intensively as its marginal revenue product has decreased. C. will lead to an increase in the marginal revenue product of all inputs used in production on the land. D. will lead to an increase in the marginal revenue product of all inputs used in production except for the land.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point F
A. is efficient and attainable. B. cannot be produced with the current state of technology. C. represents underallocation of resources. D. represents what the people want.