A regulatory agency that requires a firm to provide “universal service” must
A. prevent high profits in all markets.
B. allow the firm to cross-subsidize.
C. prevent cross-subsidization.
D. guarantee marginal cost pricing.
Answer: B
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Refer to the scenario above. Which of the following will hold true if Elly is known to be vengeful?
A) A Nash equilibrium will occur. B) Multiple equilibria will occur. C) There will be no Nash equilibrium. D) A socially inefficient equilibrium will occur.
In the early post-war years, the Fed was reluctant to continue its wartime agreement with the Treasury because it believed the result would be
A) recession. B) inflation. C) higher taxes. D) lower taxes.
From 1970 to 2010, the real price of eggs decreased. Which of the following would cause an unambiguous decrease in the real price of eggs?
A) A shift to the right in the supply curve for eggs and a shift to the right in the demand curve for eggs. B) A shift to the right in the supply curve for eggs and a shift to the left in the demand curve for eggs. C) A shift to the left in the supply curve for eggs and a shift to the right in the demand curve for eggs. D) A shift to the left in the supply curve for eggs and a shift to the left in the demand curve for eggs.
Which of the following reasons did not contribute to the rise of "King Cotton"?
a. Eli Whitney's invention of the cotton gin in 1793 b. soils and climate of the new Southwest c. large shifts in slave populations d. declines in slave populations that drove mechanical innovation