The main problem with a regulatory commission setting P = ATC is that the regulated firm will
a. experience a loss
b. find its demand curve shifting to the left
c. earn economic profits
d. refuse to make new purchases of capital
e. have little incentive to keep costs down
E
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Which of the following is consistent with secular deflation?
A) a persistently decreasing price level caused by money being withdrawn from the economy B) a persistently increasing price level caused by several periods of economic growth with decreasing AD C) a persistently decreasing price level caused by increases in government expenditures D) a persistently decreasing price level caused by several periods of economic growth with stable AD
Suppose Stan transfers $1,000 from his savings account into his checking account. What are the effects on M1 and M2 money supply?
A) M1 increases; M2 remains the same. B) M1 decreases; M2 increases. C) Both M1 and M2 increase. D) Both M1 and M2 decrease. E) Both M1 and M2 remain the same.
An economy that has interactions in trade or finance with other economies is referred to as
A) a closed economy. B) a net foreign investment economy. C) a trade-balanced economy. D) an open economy.
The Justice Department is most likely to oppose a proposed merger on the basis of the Herfindahl-Hirschman Index when the post-merger HHI is:
A) less than 100. B) less than 1000. C) between 1000 and 1800. D) greater than 1800.