Classical economists used efficiency wage models to support their belief in a self-regulating economy
Indicate whether the statement is true or false
False
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Under fair-return pricing, a regulated natural monopoly will earn zero economic profit
a. True b. False Indicate whether the statement is true or false
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete
equilibrium. a. The real risk-free interest rate rises and nominal value of the domestic currency remains the same. b. The real risk-free interest rate falls and nominal value of the domestic currency remains the same. c. The real risk-free interest rate and nominal value of the domestic currency remain the same. d. The real risk-free interest rate rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
This monopolist
A. is making a profit.
B. is taking a loss.
C. may be making a profit or taking a loss.
D. Is breaking even.
Consider an unregulated monopoly in Figure 8.13. Suppose that a second firm enters the market. As a result, if the demand curve facing each firm lies entirely below the long-run average cost curve:
A. only one of the two firms can make a positive economic profit. B. both the first and the second firm make positive economic profits. C. neither firm makes a positive economic profit. D. There is not sufficient information.