Under rate-of-return regulation, natural monopolies must use
A. pricing that takes only marginal revenue into consideration.
B. marginal cost pricing.
C. efficient pricing.
D. average cost pricing.
Answer: D
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Obama was suggesting that a job would be lost if the T-shirt were cheaper because
A. there would be no international trade. B. firms making dress shirts would go out of business. C. it would require the U.S. government to impose tariffs. D. the firm producing the shirt would go out of business. E. it would be produced in another country.
Under what circumstances will the law of one price hold, and when might it not hold?
What will be an ideal response?
For each of the following transactions, explain what happens to the merchandise trade balance, current account balance, and financial account balance in both the United States and Mexico. The exchange rate is 2 Mexican pesos per U.S. dollar
(a) A Mexican firm spends 4 million pesos to buy radiology equipment from a U.S. firm. (b) A U.S. firm buys 20,000 sombreros at 20 pesos each. (c) Mexican computer firms send 200 programmers to universities in the United States, paying tuition and expenses of $3000 each. (d) A Mexican entrepreneur gives 50,000 pesos to the United Way of San Antonio, Texas. (e) Mexican investors buy $10 million worth of 30-year U.S. Treasury bonds.
A public highway looks like a collective consumption good because there is very little traffic on it and zero congestion. Hence the marginal cost of an additional car is zero
Which of the following statements best describes why we should not assume that the road would always be a collective consumption good? a. The lack of congestion could be the result of government overproduction. b. The lack of congestion could be because of its low speed limit. c. The lack of congestion could be because of excessive police ticketing. d. The lack of congestion is because of the lower cost of alternative means of travel.