If a regulatory agency mandates that a natural monopoly charge a price equal to its average cost:
A. the firm will eventually exit the industry.
B. the firm will earn economic profits greater than zero.
C. other firms will find it profitable to enter this industry.
D. the firm will earn economic profits equal to zero.
Answer: D
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The Board of Governors of the Federal Reserve is:
a. appointed by the president, and each governor serves a 7-year term. b. appointed by the president, and each governor serves a 14-year term. c. elected by Congress, and each governor serves a 10-year term. d. elected by Congress, and each governor serves a 4-year term. e. elected by Congress, and each governor serves a 7-year term
Suppose the Fed bought $150 million of U.S. securities from the public. The reserve requirement is 20 percent, and there are no initial excess reserves. A few weeks later, if the public's holdings of currency are constant and the banks have loaned all excess reserves, the money supply will increase by
a. $150 million. b. $300 million. c. $600 million. d. $750 million.
The observed variations in practice patterns in different regions of the country is the result of all of the following except one.
a. Patients often prefer a number of different options to treat the same illness and physicians are willing to accommodate these differences. b. The observed variations are due to scientific uncertainty associated with diagnosis and treatment. c. There are many alternative treatment options available for most ailments. d. Practice variations are due to differences in demographics and disease incidence across regions. e. Medical training varies across the country depending on where the physician was trained, and most physicians' practices tend to be in the same regions.
To understand how poverty, inequality, and discrimination affect the economy, ________ analysis is used, and ________ analysis is used to address whether the government should try to reduce inequality in the name of social justice.
A. positive; objective B. normative; positive C. positive; normative D. subjective; normative