The public interest theory of regulation stipulates that government regulation of a natural monopoly is necessary in order to achieve the following, except:
A. Preventing the natural monopoly from harming society through its monopoly pricing
B. Garnering for society at least part of the cost reductions from being a natural monopoly
C. Avoiding the reduction in output associated with monopoly power
D. Eventually breaking up the monopoly to achieve competition within the industry
D. Eventually breaking up the monopoly to achieve competition within the industry
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Does a rise in the price level bring a movement along the aggregate supply curve or does it shift the aggregate supply curve?
What will be an ideal response?
A firm is considering using its own funds to finance an investment, but needs an estimate of the discount rate. Currently the firm is earning 4 percent on funds held in a bank account and 6 percent on funds held in stocks. If the firm has 20 percent of its funds in the bank account and the remaining 80 percent in stocks, what is the firm's weighted average cost of capital?
A) 5.8 percent B) 4.2 percent C) 4.4 percent D) 5.6 percent
A new U.S. import quota on imported steel would be likely to: a. reduce the cost of production to steel-using American firms. b. generate tax revenue to the government
c. increase U.S. production of steel. d. increase the production of steel-using American firms.
If a landscaper can hire an additional employee for $300 weekly, what is one concept the landscaper could use to determine whether hiring this employee is a good idea?
What will be an ideal response?