In the case where a natural monopoly exists in an industry,
a. a competitive market structure will be costly and difficult to maintain.
b. a competitive market structure will be more efficient and more equitable.
c. government regulations will always improve efficiency in this industry.
d. economies of scale will not be a consideration when analyzing the proper structure of the industry.
A
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Refer to the figure above. Which of the following statements is true when the credit demand curve is CD1 and the credit supply curve is CS1?
A) At all rates of interest above 3% there will be a tendency for real interest rates to fall. B) At all rates of interest above 4% there will be a tendency for real interest rates to fall. C) At all rates of interest above 2% there will be a tendency for real interest rates to fall. D) At all rates of interest above 1% there will be a tendency for real interest rates to fall.
According to the graph shown, what is the market price?
This graph represents the cost and revenue curves of a firm in a perfectly competitive market.
A. P1
B. P2
C. P3
D. Cannot tell from the graph.
As the housing bubble collapsed, as more foreclosures occurred, and the supply of homes for sale:
A. increased, it further decreased home values, which led to more foreclosures. B. increased, the price of homes fell, and so the demand for homes increased. C. decreased, as homeowners no longer wanted to sell their homes when prices were low. D. decreased, as homeowners refused to sell when they owed more than the market value.
Historically, some governments have relied on the revenue generated from printing currency to finance government spending. Give two examples of government's relying on paper currency to finance wartime expenditures. What do you expect happened to inflation rates during these historical episodes?
What will be an ideal response?