Mountain Water is a natural monopoly. The government decides to regulate Mountain Water by imposing a marginal cost pricing rule. The figure above shows the demand for Mountain Water. Marginal cost is $0.20 per bottle
The price of a bottle of Mountain Water is ________, and ________ thousand bottles are sold per month. A) $0.20; 400
B) $0.50; 250
C) $0.20; 500
D) $1.00; 500
A
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The above figure shows Jane's budget line and two of her indifference curves. If the price of a lobster dinner falls so that Jane can now purchase the combination represented by Point B, Jane would experience
A) an increase in the opportunity cost of a lobster dinner. B) no change in her marginal rate of substitution. C) an income and a substitution effect. D) Both answers B and C are correct.
According to real business cycle theory, the primary causes of business cycles are
A) shocks to aggregate demand. B) monetary factors. C) technology shocks. D) waves of self-fulfilling optimism and pessimism.
During the 2000s, the Federal government's deficit rose because of
a. large tax cut in 2001 and 2004.. b. large increases in government spending. c. increases in both the cyclical and structural deficits. d. a recession in 2001. e. all of the above.
Whenever the general level of prices rises because of continual increases in aggregate demand, we say that the economy is experiencing
A) supply-side inflation. B) monetary stagflation. C) demand-side inflation. D) aggregate supply shock.