A public utility is a classic example of:
A. a natural monopoly.
B. perfect competition.
C. an oligopoly.
D. monopolistic competition.
Answer: A
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Excess capacity is the
A) difference between a perfectly competitive firm's and a monopolistically competitive firm's output. B) difference between a perfectly competitive firm's and a monopoly's output. C) output at the maximum point of the ATC curve. D) None of the above answers is correct.
Two friends, Diane and Sam, own and run a bar. Diane tends bar on Monday, Wednesday, and Friday and receives a wage in addition to tips. Sam tends bar on Tuesday, Thursday, and Saturday and receives only tips. Which of the following represents an implicit cost of operating the bar?
a. Diane's wage b. Sam's time c. Diane's tips d. Sam's tips e. both Diane's and Sam's tips
If the CPI doesn't measure product quality improvements, the CPI tends to
A. Overstate the inflation rate. B. Understate economic growth. C. Be artificially low. D. Understate the inflation rate.
The accelerator theory can explain the paradox that both interest rates and investment rise and fall in concert during the business cycle if
A) the effect of changes in Y effect on In dominate the effect of interest rates on investment. B) the LM curve is constant. C) the IS curve is constant. D) the effect of changes in interest rates on In dominate the effect of changes in Y on In.