Which of the following best describes the difference between cost-of-service regulation and rate-of-return regulation?
A) Costs determine prices in cost-of-service regulation and prices determine costs in rate-of-return regulation.
B) Costs determine prices in cost-of-service regulation and prices are set in rate-of-return regulation so the firm can make a normal rate of return.
C) Variable costs determine prices in cost-of-service regulation and prices are set in rate-of-return regulation so the firm can make an economic profit.
D) Regulators determine prices in cost-of-service regulation and market forces determine prices in rate-of-return regulation.
B
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The federal minimum wage law demonstrates
a. market equilibrium. b. a societal choice for economic equity over efficiency. c. the function of equilibrium price in a competitive market. d. government intervention to ensure the equilibrium price.
Consumers in a country buy only two goods, pens and CDs. The prices and quantities purchased by urban households are in the table above. If 2011 is the reference base year, the cost of the CPI market basket in the base year is
A) $3,400. B) $3,408. C) $3,580. D) $3,508. E) $3,500.
The average total cost curves for plants A, B, C and D are shown in the above figure. Which plant is best to use to produce 80 units per day?
A) plant A B) plant B C) plant C D) plant D
When the government tries to control pollution through cap and trade, it _____
a. issues permits that enables the owners of the permit to pollute b. allows polluting firms to produce public goods that reduce pollution c. levies tax on the polluting firm d. gives subsidies to the firms who adopt clean production technologies e. takes legal actions against the firms who pollute beyond the specified level