In natural monopoly, AC continuously declines due to economies in distribution or in production, which tends to found in industries which face increasing returns to scale. If price were set equal to marginal cost, then:
a. price would equal average cost.
b. price would exceed average cost.
c. price would be below average cost.
d. price would be at the profit maximizing level for natural monopoly
e. all of the above
c
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A food truck operator originally produced hamburgers and hotdogs. To serve the tastes of their various customers, the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well. Since the new products were introduced, average costs rose dramatically. The vendor is experiencing
a. Economies of scale b. Economies of scope c. Diseconomies of scale d. Diseconomies of scope
Which of the following is not included in GDP but occurs hand-in-hand with improvements in GDP?
a. production b. services c. investment d. environmental protection
The speculative demand for money relates the quantity of money demanded (or held) to
a. the level of income b. the interest rate c. the price level d. the investment opportunity e. satisfy consumption needs
Which are liabilities to a bank?
A. Property and capital stock. B. Capital stock and demand deposits. C. Vault cash and demand deposits. D. Capital stock and reserves.