The quantity produced by a natural monopolist facing an average-cost pricing policy will be:
A. less than the quantity produced by a marginal cost pricing policy.
B. that quantity at which average costs are at their minimum.
C. that quantity at which marginal costs are at their minimum.
D. the same as the quantity that would be produced in perfect competition.
Answer: A
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Which of the following statements is FALSE?
A) Both monetary and interest rate targets cannot be pursued simultaneously. B) A reduction in the required reserve ratio increases the money supply and pushes down the equilibrium interest rate. C) An open market sale decreases the money supply and pushes up the equilibrium interest rate. D) An open market purchase reduces the money supply and pushes down the equilibrium interest rate.
The Great Stagflation of 1973-1980 was characterized by a high rate of inflation combined with the recession or stagnation of economic output that occurred during this time period. A major cause was the increase in oil prices
Indicate whether the statement is true or false
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
A rational decision maker takes an action only if the
a. marginal benefit is less than the marginal cost. b. marginal benefit is greater than the marginal cost. c. average benefit is greater than the average cost. d. marginal benefit is greater than both the average cost and the marginal cost.