An example of peak pricing is charging
A. more for long-distance phone calls in the daytime.
B. less for electricity at night.
C. more for public transportation in rush hours.
D. All of the above are true.
Answer: D
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Perfectly competitive markets will tend to under-allocate resources to nonexclusive public goods because a. these goods are produced under conditions of increasing returns to scale
b. no single individual can appropriate the total benefits provided by the purchase of such goods. c. these goods are best produced under conditions of monopoly. d. no private producer can provide the capital necessary to produce such goods.
A(n) _____ is a budget philosophy that was followed prior to the Great Depression that aimed at matching annual revenues with outlays, except during war time
a. annually balanced budget b. annual surplus budget c. biennial deficit budget d. biennially balanced budget e. cyclically balanced budget
What determines the position and shape of a society's production possibilities curve?
a. the physical resources of that society b. the level of technology of the society c. the number of factories available to the society d. all of the above
Suppose Country A had been traditionally enjoying a comparative advantage in the production of Good X. As a result, most of the large firms manufacturing and exporting Good X were concentrated in Country A. However, recently it has been observed that the comparative advantage in the production of Good X has shifted to Country B owing to better factor availability and lower input prices. Some new firms are contemplating to start operating in Country B. Which of the following conditions probably must be fulfilled to ascertain that these new firms will enjoy a cost advantage over the established firms in Country A?
A. The output level of the new firms in Country B should be large enough to enable them to achieve scale economies. B. The consumers in Country B should have a relatively elastic demand compared to the consumers in Country A. C. The number of firms to begin operation in Country B must be greater than the number of firms operating in Country A. D. The new firms in Country B should have a higher input-output ratio than the firms operating in Country A.