What is a natural monopoly? Why is government justified in regulating a natural monopoly?
A natural monopoly is a monopoly that results from very extensive economies of scale. Government is justified in regulating a natural monopoly to ensure that the monopoly does not gouge consumers with "unnecessarily" high prices.
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All of the following are functions of the Federal Reserve System (the Fed) EXCEPT
A) supplying currency. B) lender of last resort for consumers. C) check clearing. D) regulation of the money supply.
The federal funds rate is determined by demand and supply of bank reserves.
a. true b. false
The pricing of environmental damage because of pollution is difficult because of intangible losses.
Answer the following statement true (T) or false (F)
Refer to Table 4-7. Suppose that the quantity of labor supplied increases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?
A) W = $12.50; Q = 630,000 B) W = $8.50; Q = 550,000 C) W = $11.50; Q = 610,000 D) W = $9.50; Q = 610,000