When an industry is a natural monopoly,
a. it is characterized by constant returns to scale.
b. it is characterized by diseconomies of scale.
c. a larger number of firms may lead to a lower average cost.
d. a larger number of firms will lead to a higher average cost.
d
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A firm's average total cost is $80, its average variable cost is $75, and its output is 50 units. Its total fixed cost is
A) less than $100. B) between $100 and $200. C) between $200 and $300. D) more than $300.
Suppose the money demand of individuals and firms depends on what they perceive to be the probabilities that the economy will expand or contract over the following six months
Suppose their money demand is given by the equation L = 0.5Y - 100i + 20z, where z is the probability that the economy is expanding six months in the future. If z = 1, the economy will certainly be in recovery, if z = 0, the economy will certainly be in recession, and for z between 0 and 1 there is some uncertainty about the future state of the economy. Use a classical (RBC) model of the economy. If the Fed moves the money supply to target the price level, how does the money supply relate to the expected future state of the economy? Is this an example of reverse causation?
Which of the following is a positive incentive?
A. Discover credit cards offer 0 percent balance transfer rates for someone to open a new account. B. McDonalds decides to offer a white chocolate mocha. C. A school teacher decides to retire and focus on gardening. D. A business decides to leave the industry.
A monopoly has
a. A perfectly elastic demand curve b. A perfectly elastic supply curve c. A downward sloping demand curve d. A upward sloping demand curve