In a natural monopoly situation
A) there are large economies of scale relative to demand.
B) the firm has an upward sloping average cost curve.
C) producers try to differentiate their product with advertising.
D) there is no need for government regulation.
Answer: A
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Suppose a price index is formed to measure changes in the price level between 1989 to 1995. If the price index focuses on the year-to-year costs of the typical market basket purchased in 1989, then the reported price changes
a. seem worse for consumers than they really are. b. seem better for consumers than they really are. c. accurately reflect changes in people's levels of satisfaction. d. may overestimate or underestimate the effects of price changes, depending on whether consumers' indifference curves are relatively flat or steep.
The nominal rate of interest is any rate of interest below 3 percent
a. True b. False Indicate whether the statement is true or false
Given the table below, what is the marginal cost of the 250th unit of output? 
A. $4.00 B. $0.14 C. $7.40 D. $2.40 E. none of the above
The income effect of a wage rate decrease should lead to
A. a decrease in quantity of labor supplied and an increase in leisure. B. an increase in the quantity of labor supplied and a decrease in leisure. C. a decrease in the quantity of labor supplied and a decrease in leisure. D. an increase in the quantity of labor supplied and an increase in leisure.