Marginal cost pricing implies a loss on every unit of output produced by natural monopoly.
Answer the following statement true (T) or false (F)
True
If naturally monopolistic firms are required to charge P = MC (price efficiency), economic profits will be negative because MC is below ATC over the relevant range of output for a natural monopoly.
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The individual supplies of apples from three apple orchards are 460, 580, and 700 apples respectively, when the equilibrium price of an apple is $0.75 . Identify the correct statement from the following
a. The market supply at $0.75 is 1,540 apples. b. If the price rises above $0.75, the market supply will be lower than 1,740 apples. c. If the price rises above $0.75, there will be an excess demand for apples in the market. d. The market demand at $0.75 is 1,740 apples.
Suppose that Brazil and Peru exchange coffee and leather. Brazil can produce both coffee and leather more efficiently than Peru, but Brazil can produce coffee more efficiently than leather. Comparative advantage states that:
A) Brazil should produce both coffee and leather and not trade. B) Brazil should produce coffee, Peru should produce leather, and both countries should trade. C) Brazil should produce leather, Peru should produce coffee, and both countries should trade. D) Peru should produce both coffee and leather and not trade.
Which of the following is a difference between stocks and bonds?
A. Stocks are issued for a fixed period; bonds are not. B. Stocks pay interest; bonds pay dividends. C. Bond payouts are more predictable than payouts from stocks. D. Bonds represent ownership; stocks represent debt.
In a given year, a country's GDP = $3843, net factor payments from abroad = $191, taxes = $893, transfers received from the government = $422, interest payments on the government's debt = $366, consumption = $3661, and government purchases = $338. Calculate the values of private saving, government saving, and national saving.
What will be an ideal response?