In the above figure, if the natural monopoly is regulated and a marginal cost pricing rule is followed, then the consumer surplus will be
A) $192 million.
B) $108 million.
C) $60 million.
D) $48 million.
A
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The oversimplified multiplier formula assumes that the
A. level of consumption spending is fixed. B. price level is fixed. C. government spending is fixed. D. net exports depend on income.
An individual consumes only two goods, X and Y. Which of the following expressions represents the utility maximizing market basket?
A) MRSxy is at a maximum. B) Px/Py = money income. C) MRSxy = money income. D) MRSxy = Px/Py. E) all of the above
A philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a society
a. free enterprise b. traditional economy c. incentive d. safety net e. socialism
Answer the following statement true (T) or false (F)
1) In the long run, monopolistically competitive firms make normal profits because they are forced to operate at the minimum point on their average total cost curve. 2) The monopolistically competitive seller maximizes profits by equating price and marginal cost. 3) Monopolistically competitive firms are inefficient because they produce at a point on the rising segment of their average cost curves. 4) The demand curve of a monopolistically competitive producer is less elastic than that of a purely competitive producer.