Graphically show why one electric company can operate more cheaply than two.
What will be an ideal response?
Figure 11-10
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Why do some utilities have an incentive to exaggerate their costs of production?
What will be an ideal response?
The independence of the Fed
A. allows it to run a monetary policy different from that which elected officials might demand. B. means that the Fed frequently pursues policies quite different from what the President asks for. C. is widely agreed to be best for the nation's welfare. D. is not real, since Congress must approve its policy.
Microeconomics is best described as the study of:
A. the choices made by individual households, firms, and governments. B. inflation, unemployment, gross national product, and the nation's economy as a whole. C. how markets interact in the aggregate economy. D. marginal changes in the economy.
Expenditures on services fluctuate less than expenditures on durable goods.
Answer the following statement true (T) or false (F)