If a firm was able to acquire control over access to bauxite, the ore used in aluminum manufacturing, it would gain monopoly control of the aluminum industry because that firm
A. holds a patent.
B. is given the right to control the market by government.
C. controls an essential input.
D. is a natural monopoly.
Answer: C
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In the coordination failure model, we mention sunspots because
A) they influence business cycles. B) apparently irrelevant events may influence business cycles. C) in central banker speak, they are synonymous with open market operations. D) seasonal sunshine has an impact on the business cycle.
Free market economists
A) believe in the fundamental stability of the economy. B) believe that government policy can create a stable economy. C) and Keynesians hold the same macroeconomic views. D) believe that the Federal Reserve is the source of economic stability.
Total benefits minus total cost equals:
A. gross benefit. B. marginal benefit. C. net benefit. D. incremental benefit.
Banks hold reserves:
A. to increase profits. B. to meet depositor withdrawals and payments. C. only because the government requires them to hold reserves. D. to earn interest.