Refer to the accompanying table. If the price of Good A is $5 and the price of Good B is $4, then the rational spending rule is satisfied when the consumer purchases ________ units of Good A and ________ units of Good B.UnitsMarginal Utilityof Good AMarginal Utilityof Good B1304022733315244814
A. 4; 2
B. 3; 3
C. 3; 2
D. 1; 3
Answer: D
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Because natural monopolies have a declining average cost curve, regulating natural monopolies by setting price equal to marginal cost would
a. cause the monopolist to operate at a loss. b. result in a less than optimal total surplus. c. maximize producer surplus. d. result in higher profits for the monopoly.
Your boss asks you to do fundamental analysis of a corporation. What value is she asking for and how would you estimate this value?
Rita makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. The opportunity cost of Rita's trip to the concert is:
A. $500. B. $600. C. $450. D. $300.
What are three policy options for dealing with pure monopolies that are entrenched and inefficient?
What will be an ideal response?