The rate-of-return regulated public utility has strong incentive to control cost
Indicate whether the statement is true or false
F The monopoly position of the rate-of-return regulated public utility allows it to raise revenue to cover costs, especially because its prices are based on its own costs, and unless some other device is used to improve its incentives it is not strongly motivated to control costs.
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Use the figure below to answer the following question.
If the output level is Q2, then there will be
A. minimum net producer surplus. B. greater marginal benefits than marginal costs of the product. C. productive efficiency. D. maximum deadweight losses.
Rational expectations theorists believe that governments publicizing their economic goals ______.
a. is necessary to educate the people, so they behave as intended b. leads people to act in their own interests and undercut the government’s intended outcomes c. prevents people from being able to anticipate the future of the economy d. is the most important step in being able to meet the government’s goals
Consider a simple linear regression model, wage = 
+
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Assume that a large capital-abundant country trades only two goods with the rest of the world, medical equipment and corn. Medical equipment is relatively capital-intensive. An increase in the country's endowment of capital will cause the price of medical equipment relative to the price of corn to
A. rise at first and then fall. B. fall. C. stay the same. D. rise.