The government allows ________ companies to operate as regulated monopolies.
A) airline
B) mining
C) utility
D) timber
E) telecommunications
C) utility
Explanation: C) Utility companies are often permitted to operate as regulated monopolies because they deal with limited supplies of resources like water. However, although they are allowed to run as monopolies, the government will regulate their prices to ensure that they do not inflate prices.
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Correcting a market with an externality through taxation creates ___________ total surplus compared to correcting it through a quota.
A. more B. less C. the same D. Any of these statements could be true depending on whether the tax is imposed on the buyer or seller.
__________ ownership of capital gives capitalism its name.
Fill in blank(s) with correct word
When a firm is operating at its minimum efficient scale, its short-run average total cost of production is minimized
a. True b. False
Use the law of diminishing marginal utility to explain why a pizza parlor might price pizzas in the following way: "Buy one pizza for $12, get the second pizza for $6." Why not simply charge $9 per pizza instead?