A natural monopoly's output is less if it is regulated with
A) a marginal cost pricing rule than if it is unregulated.
B) an average cost pricing rule than if it is unregulated.
C) an average cost pricing rule than if it is regulated with a marginal cost pricing rule.
D) a marginal cost pricing rule than if it is regulated with an average cost pricing rule.
E) More information about the firm's demand is needed to determine how its output depends on what regulation it faces.
C
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If a 10% increase in the price of one good, A, results in an increase of 5% in the quantity demanded of another good, B, then it can be concluded that A and B are
A. complementary goods. B. substitute goods. C. secondary goods. D. independent goods.
In the aggregate expenditures diagram, the 45° line represents the equilibrium condition that
A. Y* = Y. B. AE = C + I + G + NX. C. I = C. D. Y = AE.
The unemployment rate is obtained by
A) dividing the number of employed people by the number of unemployed people. B) dividing the number of employed people by the noninstitutional population. C) dividing the number of unemployed people by the noninstitutional population. D) dividing the number of unemployed people by the civilian labor force.
Those who favor a passive approach to policy often argue that changes in prices and wages will shift the:
a. short-run aggregate supply curve before active policy shifts the aggregate demand curve b. short-run aggregate supply curve only after active policy shifts the aggregate demand curve. c. short-run aggregate supply curve more than active policy shifts the aggregate demand curve. d. short-run aggregate supply curve less than active policy shifts the aggregate demand curve. e. short-run aggregate supply curve in a direction opposite the shift in the aggregate demand curve