Natural monopoly exists when
a. marginal costs are less than average costs for all output levels
b. average costs are less than marginal costs for all output levels
c. profit is impossible for a private firm
d. efficient production is impossible for a private firm
e. none of the above
A
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Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund
A) make loans to the riskiest nations so that private investors will not be tempted to take a risk. B) impose tougher preconditions on borrowers. C) not make loans to risky nations because there is a high demand for funds from safer nations. D) loan only to countries that have free elections.
The main reason that hyperinflation renders a currency worthless is that ________
A) the government cannot print money fast enough to keep up with the rising prices B) laws against raising prices are easily evaded C) reducing government expenditures is politically unpopular D) the government's "official" inflation rate is always a gross understatement E) as soon as inflation seems out of control, everyone knows that the currency will soon lose whatever value it has today
HMOs seek to contain health care costs by exerting control over patients' treatment options
a. True b. False Indicate whether the statement is true or false
The short run is the time period
A. In which only the amount of capital may be altered. B. Over which an investment decision can be made. C. In which some costs are fixed. D. Necessary so that profits can be earned from production.