An increasing-cost industry is so named because of the positive slope of which curve?
A) Each firm's short-run average cost curve
B) Each firm's short-run marginal cost curve
C) Each firm's long-run average cost curve
D) Each firm's long-run marginal cost curve
E) The industry's long-run supply curve
E
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The primary explanation for why a regulatory commission may protect the monopoly it is supposed to regulate is that the commission members
a. regularly receive gifts and bribes b. are incompetent c. are experts sympathetic to industry management d. work to increase industry competition e. are directly accountable to the public
Which of the following is not correct?
a. The higher average return on stocks than on bonds comes at the price of higher risk. b. Risk-averse persons will take the risks involved in holding stocks if the average return is high enough to compensate for the risk. c. Insurance markets reduce risk, but not by diversification. d. Risk can be reduced by placing a large number of small bets, rather than a small number of large bets.
The Consumer Price Index measures
A. hourly wage rates of manufacturing workers. B. the average of the prices of all goods produced in a country and goods imported from other countries. C. the average of raw material prices paid by producing firms. D. the level of prices with respect to goods and services purchased by a typical consumer in urban areas.
Related to the Economics in Practice on p. 105: Researchers found that a ten percent reduction in the tax rate induced a twenty percent increase in migration in Europe. This indicates that labor migration in Europe is
A. inelastic. B. elastic. C. unit elastic. D. perfectly inelastic