The average fixed cost curve is:
A. horizontal.
B. always upward-sloping.
C. always downward-sloping.
D. U-shaped.
Answer: C
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The difference in present value between a perpetuity that promised $1 per year starting today and one that promised $1 per year starting next year is
a. 0. b. $1. c. $1/(1 + r). d. $r/(1 + r).
(I) Historically, countries with colonial settlers who planned on staying for long periods of time set up sound economic institutions. (II) Countries with harsh environments not suitable for permanent settlements resulted in colonial settlers adopting weaker and less productive economic institutions before leaving
a. I is true; II is false. b. I is false; II is true. c. Both I and II are true. d. Both I and II are false.
Exhibit 13-1 Cable television monopolist
As shown in Exhibit 13-1, regulators might follow a fair return pricing strategy and require the cable television monopolist to operate at point:
A. A. B. B. C. C. D. D.
A floor price is
A. equal to the initial market equilibrium price. B. below the initial market equilibrium price. C. the maximum legal price that can be charged in a market. D. the minimum legal price that a firm can charge.