In regulated industries, the optimal regulation is to set price such that MC=P.
Answer the following statement true (T) or false (F)
False
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In the specific factors model, a 5% decrease in the price of food accompanied by a 5% decrease in the price of cloth will cause ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in
the welfare of the fixed factor in the production of cloth. A) no change; no change; no change B) an increase; an increase; an increase C) a decrease; an increase; an increase D) an increase; a decrease; a decrease E) a decrease; a decrease; a decrease
Assume that initially country A exchanges three barrels of oil for one ton of steel from country B. Later the arrangement changes to four barrels of oil for one ton of steel. This indicates that:
a. the terms of trade for country B have improved. b. country A has a comparative advantage in the production of steel. c. the relative price of steel in terms of oil has fallen. d. the terms of trade for country A have improved. e. country B has an absolute advantage in the production of oil.
Economists estimate that the total lag for monetary policy is about:
A. 1-2 days. B. 2 weeks to 1 month. C. 3-12 months. D. 2-4 years.
If you sum the squares of the market shares of each firm in an industry (as measured by percent of industry sales), you are calculating the:
A. four-firm concentration ratio. B. Herfindahl index. C. degree of collusion. D. Lerner index.