Under an average-cost pricing policy:
A. a regulatory agency picks a price equal to a natural monopoly's marginal cost.
B. a regulatory agency picks a price equal to a natural monopoly's average fixed cost.
C. a regulatory agency picks a price at which a natural monopoly's demand curve intersects its average cost curve.
D. firms earn economic profits greater than zero.
Answer: C
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Possible sources of an upward bias in the CPI include the
a. quantity adjustment bias. b. substitution bias. c. new products bias. d. Both b and c e. All of the above
If the Fed was trying to reduce demand-pull inflation, it might:
a. sell government securities, lower reserve requirements and lower the discount rate. b. sell government securities, raise reserve requirements and raise the discount rate. c. sell government securities, lower reserve requirements and raise the discount rate. d. buy government securities, lower reserve requirements and raise the discount rate.
If MC > MR,
a. output should be reduced. b. marginal profit is positive. c. there are losses. d. output should be increased.
Total utility is best defined by which of the following?
a. The total satisfaction received from consuming a particular amount of a product b. The additional satisfaction received from consuming one more unit of a product c. The maximum amount of satisfaction from consuming a product d. The change in marginal utility multiplied by the price of a product