A market is a natural monopoly when:
A. a good is produced most economically by several firms.
B. a good is produced most economically by one firm.
C. the government grants a firm a patent on a good.
D. the firm's average cost function is everywhere upward sloping.
B. a good is produced most economically by one firm.
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The argument that rising energy prices caused the decline in U.S. productivity in the 1970s is made less believable due to the
A. falling level of saving in the 1970s. B. falling level of energy prices in the 1980s. C. rising level of energy prices in the 1980s. D. rising level of energy prices in the 1990s.
According to rational expectations
A) expectations of inflation are viewed as being an average of past inflation rates. B) expectations of inflation are viewed as being an average of expected future inflation rates. C) expectations formation indicates that changes in expectations occur slowly over time as past data change. D) expectations will not differ from optimal forecasts using all available information.
Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?
a. an increase in consumer income b. a decrease in consumer income c. greater government restrictions on agricultural chemicals d. fewer government restrictions on agricultural chemicals
A WTO member country must offer all other member countries ________ that are offered to any single member country
a. common-market guarantees b. the same trade concessions c. the same basket of commodities d. import substitutions