Shortage means the same thing as scarcity
Indicate whether the statement is true or false
FALSE
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The rail system in Metropolis is a natural monopoly. If the government regulates the system by setting the fare equal to marginal cost, which of the following will be true?
a. Price and output will be higher than if the monopoly were unregulated. b. Price and output will be lower than if the monopoly were unregulated. c. Price will be lower and output higher than if the monopoly were unregulated. d. Price will be higher and output lower than if the monopoly were unregulated. e. Profit will be lower than if the monopoly were unregulated, but price and output could either increase or decrease.
The change in total costs when output changes is called
A) average variable costs. B) marginal product. C) average total cost. D) marginal cost.
For natural monopoly markets, government regulators frequently encourage competition among a number of firms.
Answer the following statement true (T) or false (F)
Which of the following would not be associated with a favorable supply shock?
a. the short-run Phillips curve shifts left b. unemployment falls c. the price level rises d. output rises.