A natural monopoly exists when a firm
a. owns all of the world's known reserves of a natural resource.
b. has an average cost curve that is decreasing at the point where it crosses demand.
c. has obtained a patent on a new genetically modified organism.
d. is able to practice price discrimination in the sale of a natural resource.
b. has an average cost curve that is decreasing at the point where it crosses demand.
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Voting members of the Federal Open Market Committee are
A) the Board of Governors, the presidents of five Federal Reserve Banks, and the Comptroller of the Currency. B) the Board of Governors and presidents of five Federal Reserve Banks. C) the Board of Governors and all twelve Federal Reserve Bank presidents. D) the Board of Governors, all twelve Federal Reserve Bank presidents, and the Secretary of the Treasury.
Social Security payments are indexed for inflation using the CPI. A recent newspaper editorial claimed that Social Security recipients are harmed by years of low inflation because they do not receive as large an increase in their payments as they do in years of high inflation. Which of the following statements is correct?
a. The newspaper editorial is correct under all circumstances. b. The newspaper editorial is correct if the market basket consumed by Social Security recipients is the same as the market basket used to compute the CPI. c. The newspaper editorial could be correct if the prices of the goods consumed by Social Security recipients change at a different rate than the prices of the goods in the market basket used to compute the CPI d. The newspaper editorial is incorrect under all circumstances.
The U-shaped average total cost curve is _____
A. a result of constant marginal returns. B. a result of increasing marginal returns. C. unrealistic because average total cost always increases as output increases. D. the result of average fixed cost falling and decreasing marginal returns as output increases. E. a result of firms' wanting to find the output level where cost is at its minimum.
When negative externalities exist, the competitive market supply curve does not include all of the costs borne by members of society
Indicate whether the statement is true or false