Eliminating economic profit of a natural monopolist may be justifiable on the basis of society's equity goal.
Answer the following statement true (T) or false (F)
True
A monopoly is most likely to earn an economic profit due to market power and lack of competition. Although equity is subjective, the presence of economic profits may violate visions of equity.
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Use the following information to answer the question below. Cloe is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents each and hard candies cost 80 cents each. The marginal utilities derived from the consumption of each product are as shown in the following table.Number of Items Marginal Utility of Chocolates Marginal Utility of Hard Candies 1 60 150 2 50 140 3 40 120 4 30 100 5 20 80 6 10 70 7 5 50 8 0 20 Which combination would maximize Cloe's total utility given her $4 budget?
A. 0 chocolates and 5 hard candies B. 2 chocolates and 4 hard candies C. 4 chocolates and 3 hard candies D. 6 chocolates and 2 hard candies
If an economy is growing at 2 percent a year but its rate of technology growth is 1 percent a year, then this country must be:
a. below its steady state level of capital per worker. b. expected to grow slower in the future. c. has a savings rate that is too low. d. none of the above.
When profits occur in the future, the ________ the profit occurs, the ________ it is discounted and the ________ positive effect it has on the net present value.
A) sooner; less; smaller B) sooner; more; larger C) sooner; less; larger D) later; more; larger
Which of the following statements best describes the best public policy solutions for international trade?
a. The best public policy solutions involve some degree of protectionism, while finding other ways for public policy to address the particular issues, eventually allowing the benefits of international trade to occur. b. The best public policy solutions typically do not involve protectionism but instead involve finding ways for public policy to address the particular issues, while limiting the benefits of international trade to occur. c. The best public policy solutions typically do not involve protectionism but instead involve finding ways for public policy to address the particular issues, while still allowing benefits of international trade to occur. d. The best public policy solutions require protectionism, in addition to finding ways for public policy to address the particular issues, while still allowing the benefits of international trade to occur.