As a consumer buys more of a good, total utility eventually becomes negative
a. True
b. False
B
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If government regulators force a natural monopoly to produce where price equals marginal cost, the monopoly will earn
a. a "fair return" b. positive economic profit c. zero economic profit d. negative economic profit e. greater economic profit than if it were unregulated
Stocks and bonds are
a. financial assets; therefore, they are considered to be money b. highly-liquid financial assets; therefore, they are considered to be money c. not highly-liquid financial assets; therefore, they are not considered to be money d. widely accepted means of payment; therefore, they are considered to be money e. not financial assets; therefore, they are not considered to be money
If a state requires all drivers to purchase auto insurance, insurance companies still face the problem of
A) correctly pricing their insurance. B) sunk costs. C) adverse selection. D) excess demand for their insurance.
When negative externalities exist in a market, if the producers are forced to pay a Pigouvian tax then:
A. those who interact in the market will lose surplus. B. those who interact in the market will gain surplus. C. producers will gain surplus. D. those who do not interact in the market but are affected by the externality will lose surplus.