If a natural monopolist is unregulated, then
A. the monopolist will be earning just a normal rate of return on investment.
B. the monopoly will produce inefficiently from society's point of view.
C. the monopoly will produce efficiently from society's point of view.
D. the monopolist will determine the profit maximizing quantity by equating marginal cost to the demand curve.
Answer: B
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In the text, U.S. and Mexico trade corn and oil and both end up with more corn and oil. Economists refer to this increased global output as
a. terms of trade b. advantage of trade c. absolute advantage d. comparative advantage e. gains from trade
One advantage of issuing a bond to raise money rather than a stock is that issuing a bond allows a corporation to: a. preserve equity
b. generate funds. c. invest in capital. d. enable expansion.
Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,
a. the demand curve for physicals shifts to the right. b. the supply curve for physicals shifts to the left. c. the quantity demanded of physicals increases and the quantity supplied of physicals decreases. d. the number of physicals performed stays the same.
Which of the following might be used to protect a monopoly from competition?
A.) A horizontal demand curve. B.) Marginal revenue. C.) A patent. D.) A contestable market.