If government officials break a natural monopoly up into several smaller firms, then
a. competition will force firms to attain economic profits rather than accounting profits.
b. competition will force firms to produce surplus output, which drives up price.
c. the average costs of production will increase.
d. the average costs of production will decrease.
C
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Holding other factors constant, if food prices decline relative to the prices of other products, then the real wages of agricultural workers will ________ and employment of agricultural workers will ________.
A. increase; increase B. decrease; not change C. increase; decrease D. decrease; decrease
If both demand and supply rise, which of the following must be true?
a. The equilibrium quantity will rise. b. The equilibrium quantity will fall. c. The equilibrium quantity will not change. d. The change in the equilibrium quantity is indeterminate.
The level of fiscal federalism in the European Union is
A) too big to cushion member countries from adverse economic events. B) too small to cushion member countries from adverse economic events. C) appropriate to cushion member countries from adverse economic events. D) too big relative to the one in the U.S. E) similar in its level to that of the U.S.
What does the idea of a trade-off between inflation and unemployment mean?
(a) That lower inflation could be established but only at the cost of higher unemployment (b) That lower unemployment could be achieved but only at the cost of more government spending (c) That lower inflation could be established but only at the cost of lower unemployment (d) That lower unemployment could be achieved but only at the cost of lower inflation rates