Regulation is guaranteed to be more efficient than a monopoly
A) True, the government is able to internalize the dead weight loss of the monopoly.
B) True, the consumers are better off if government provides the product rather than a private firm.
C) False, the government does not always have sufficient information to provide a more efficient market outcome.
D) False, the consumers are worse off under government regulation.
C
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Business taxes increase. What is the impact on aggregate expenditures and income?
A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases.
What is the role of the Federal Open Market Committee (FOMC)?
(A) It makes key decisions about interest rates and the growth of the United States money supply. (B) It redraws the map of the 12 Federal Reserve Districts every ten years in response to economic changes. (C) It collects information on each Federal Reserve District and reports on economic conditions to the Board of Governors. (D) Composed of seven members appointed by the President, it oversees the Federal Reserve System.
Ocean Spray is considered to be an oligopoly firm because, until the 1990s, it faced little competition in the market for fresh and frozen cranberries. Why?
A) Ocean Spray had a patent on the production of cranberries that gave the company the exclusive right to market its product for 20 years. The 20-year period ended in the 1990s. B) Until the 1990s, Ocean Spray controlled almost the entire supply of cranberries. C) Ocean Spray was able to achieve significant economies of scale in the production of cranberries. Beginning in the 1990s, other firms finally achieved economies of scale as well, but Ocean Spray still controls about 80 percent of the cranberry market. D) The federal government imposed a high tariff on cranberry imports. During the 1990s the tariff was eliminated, but Ocean Spray still controls about 80 percent of the cranberry market.
Average variable costs fall continuously as quantity of output rises.
Answer the following statement true (T) or false (F)