Which of the following statements about natural monopoly is correct?
A) Governments regulate natural monopolies in order to ensure that costs of production are minimized.
B) Governments regulate natural monopolies in order to ensure that the firm earns a normal profit.
C) Governments regulate natural monopolies in order to prevent them from making profits.
D) Governments regulate natural monopolies in order to keep their workers from earning wages that are too high.
B
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Suppose that you own a house. What is the opportunity cost of living in the house?
A) The opportunity cost is the rent you could have received from a tenant if you didn't live there. B) There is no opportunity cost unless you could set up a business in the house. C) There is no opportunity cost because you own the house. D) The opportunity cost is the cost of your monthly mortgage payment plus bills.
The water and diamonds paradox of value
A) is that water is essential for life and yet is cheap, whereas diamonds are totally nonessential and yet are expensive. B) points out that we generally have a low total utility of water and a high total utility of diamonds. C) is resolved by the principle that market price is determined by total utility, not marginal utility. D) none of the above
Is there one optimal environmental standard for the entire world? If not, how might using trade barriers to enforce country-specific environmental standards reduce overall well being?
What will be an ideal response?
Compensatory damages are meant to reimburse for:
a. actual losses, economic in nature b. actual losses, noneconomic in nature c. the wrongful behavior causing injury d. all of the above e. a and b only