Public utilities are the classic examples of
A. industries protected by patents.
B. industries owning a scarce factor of production.
C. natural monopolies.
D. industries with network effects.
Answer: C
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C
The ratio of a change in consumption to a change in income is the:
a. consumption function. b. propensity to consume. c. average propensity to consume. d. extra propensity to consume. e. marginal propensity to consume.
If an excise tax is imposed on shirts,
a. the number of shirts produced will exceed the number demanded b. the number of shirts demanded will exceed the number supplied c. the equilibrium market price will decrease d. the amount consumers pay for each shirt will decrease e. the net revenue producers receive from each shirt will decrease
Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?
a. Dylan receives a salary for his work as a financial analyst for an investment firm. b. Kristin buys two business suits to wear to her job as a Chief Information Officer. c. Jim receives clean water in his home in exchange for paying his water bill. d. Caroline owns a nail salon and receives payments from her clients for her services.