Discuss the effects of technological change on the elimination of natural monopolies.
What will be an ideal response?
In the telecommunications industry, the monopoly position of AT&T was eliminated by fiber and satellite technologies that eliminated the need for and high fixed costs of laying telephone cable. This allowed new entry into the telephone market. In the cable TV industry the innovations of satellite TV and broadband delivery of TV programming caused this market to be contestable and more competitive than before. In both cases, the natural monopolies no longer had unit cost advantages.
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"If Mexico is currently operating at a point inside its production possibilities frontier, then there are unemployed or misallocated resources in Mexico." Is this statement true or false? Briefly explain your answer
What will be an ideal response?
Which of the following is not a principal-agent relationship?
a. Adam and Gloria get married. b. Payless, Getless, Inc., hires a salesperson. c. Dixie hires a lawyer. d. Citizens elect a state senator. e. Opal gets her car repaired.
Which federally funded program provides those who are eligible with a debit card to pay for food?
a. SNAP b. TANF c. EITC d. AFDC
Although the FDIC was created to prevent bank failures, its existence encourages banks to
A) take too much risk. B) hold too much capital. C) open too many branches. D) buy too much stock.