The key to reaching a Pareto optimum through mutually beneficial exchange _____
a. is to remove barriers to international trade
b. is to establish property rights for valuable resources
c. is to provide start-up capital to fledgling entrepreneurs
d. is to encourage people to use online auction services
b
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All natural monopolies are characterized by
a. decreasing marginal cost at the point where their marginal cost curve crosses their demand curve. b. the fact that they earn economic losses. c. decreasing average costs at the point where their average cost curve crosses their demand curve. d. the fact that losses can only be avoided if they are regulated.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
One of the ways the market for used cars copes with the problems associated with private information is through the offering of
A) leases. B) warranties. C) low interest rates. D) low prices.
If average total cost is $50 and average fixed cost is $15 when output is 20 units, then the firm's total variable cost at that level of output is
A) $1,000. B) $700. C) $300. D) impossible to determine without additional information.