Describe how government is involved in creating a monopoly. Why might the government create one? Give an example
The government can create a monopoly by giving a single firm the exclusive right to produce some good. Monopolies are created for many reasons. When an industry is characterized by high fixed costs, a single firm can usually supply the entire market at a lower cost than having multiple firms in the industry. Examples include most utility companies. The government also grants sole ownership of inventions through patent laws in order to help eliminate the market failure that is likely to otherwise occur in the markets for those goods. Patents encourage creativity and research and development.
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Looking at the U.S. balance of payments for the last two decades, how have the current account and the capital and financial account changed?
What will be an ideal response?
Economists use the term externalities to refer to
A) consequences people ignore in their decision making. B) any cost associated with an action. C) foreign imports or exports. D) the behavior in which people actually engage as distinct from their alleged reasons for acting as they do. E) the outside directors of a corporation as distinct from corporate directors who are also managers.
When an employer pays the cost of educating a worker, it is likely that the employer
a. is demonstrating altruistic motives. b. is pursuing some objective other than profit-maximization. c. hopes to recapture his investment in the form of increased labor productivity. d. receives reimbursement from the government for the cost of the education.
Iggie took a university teaching job as an assistant professor in 1980 at a salary of $15,000 . By 2011, she had been promoted to full professor, with a salary of $70,000 . If the price index was 82 in 1980 and 225 in 2011, then what is Iggie's 1980 salary in 2011 dollars?
a. $5,400 b. $20,466 c. $26,158 d. $41,159