One reason why it is difficult to regulate a natural monopoly is
a. the lack of relevant economic theory
b. determining what price the firm is actually charging its customers
c. determining the appropriate side payment
d. an information problem — the monopoly's managers have an incentive to overstate costs
e. an information problem — the monopoly's managers have an incentive to overstate revenues
D
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Oligopoly differs from monopolistic competition in that an oligopoly includes
A) product differentiation. B) barriers to entry. C) no barriers to entry. D) downward-sloping demand curves facing the firm.
Income inequalities are greatest in
A. Poor countries such as Namibia. B. Developed countries such as Japan. C. Rich countries such as the United States. D. Countries with high levels of GDP.
How does government's power to coerce behavior tend to reduce private-sector risk?
A. By enforcing contracts and discouraging illegal behavior that threatens private property. B. By guaranteeing that the government will financially cover any losses by private-sector firms. C. By strictly regulating the allocation of most property resources in the economy. D. The coercive power of government only increases private-sector risk.
According to both the equation of exchange and the quantity theory of money
A. an increase in the money supply will decrease real Gross Domestic Product (GDP). B. an increase in the money supply will increase real Gross Domestic Product (GDP). C. a decrease in the money supply will decrease the velocity of money. D. a decrease in the money supply will decrease the price level.