A natural monopoly
A) has one lowest-cost producer in the industry.
B) exists only when it is regulated.
C) has long-run average costs equal to zero.
D) always experiences diseconomies of scale.
Answer: A
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Modeling trade in imperfectly competitive industries is problematic because
A) there is no single generally accepted model of behavior by imperfectly competitive firms. B) there are no models of imperfectly competitive behavior. C) it is difficult to find an imperfectly competitive firm in the real world. D) collusion among imperfectly competitive firms makes usable data rare. E) there is only a single model of imperfect competition (monopoly) but imperfect competition can take many forms in the real world.
We assume the marginal benefit of consumption ________ as we consume fewer units of a good.
A. remains constant B. decreases C. increases D. could either increase or decrease
If a good is imported into (large) country H from country F, then the imposition of a tariff in country H
A) raises the price of the good in both countries (the "Law of One Price"). B) raises the price in country H and cannot affect its price in country F. C) lowers the price of the good in both countries. D) lowers the price of the good in H and could raise it in F. E) raises the price of the good in H and lowers it in F.
New classical economists believe that if policy is correctly anticipated and if rational expectations hold, when the Fed increases the money supply the result will be a(n) ______________ in the price level and ____________________________
A) decrease; no change in Real GDP B) decrease; decrease in Real GDP C) increase; no change in Real GDP D) increase; increase in Real GDP