If an average cost pricing rule is imposed on the natural monopoly in the figure above, then the deadweight loss will be
A) $0.
B) $1 million.
C) $9 million.
D) $16 million.
B
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The real seignorage collected by the government in an all-currency economy is the product of
A) the rate of inflation and the real supply of government bonds. B) the rate of inflation and the real money supply. C) the debt—GDP ratio and the real money supply. D) the debt—GDP ratio and the rate of inflation.
Macroeconomics is the study of ________ while microeconomics studies ________
A) large business enterprises; small business ventures B) the overall household economic activity; market behavior C) an individual firm; the overall economic performance of a nation D) the overall economic performance of the world; the economy of a single country E) none of the above
If the demand for computers increases as consumers' incomes rise, then computers are:
A. a complementary good. B. a substitute good. C. an inferior good. D. a normal good.
If Callum is consuming his utility maximizing bundle and the price of one good rises, what happens to the marginal utility per dollar spent on this good (MU/P), and what should Callum do?
A) MU/P has increased and Callum should buy more of this good. B) MU/P has increased and Callum should buy less of this good. C) MU/P has decreased and Callum should buy more of this good. D) MU/P has decreased and Callum should buy less of this good.