A natural monopoly
A. exists only when it is regulated.
B. always experiences diseconomies of scale.
C. has one lowest-cost producer in the industry.
D. has no market demand in the long run.
Answer: C
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Tracy and Amy are playing a game in which Tracy has the first move at X in the decision tree shown below. Once Tracy has chosen either the top or bottom branch at X, Amy, who can see what Tracy has chosen, must choose the top or bottom branch at Y or Z. Both players know the payoffs at the end of each branch. 
If before Tracy chose, Amy could make a credible commitment to choose either the top or bottom branch when her turn came, then Amy would commit to the ________ branch and Tracy would choose the ________ branch.
A. top; top B. top; bottom C. bottom; bottom D. bottom; top
The existence of economic profits in a perfectly competitive industry
A. will signal resources to flow into that industry. B. gives the investors in that industry a return on investment that just covers opportunity costs. C. indicates an inelastic demand for the industry's products. D. indicates that economic resources are being used efficiently in that industry.
Answer the following questions true (T) or false (F)
1. The government makes all economic decisions in a centrally planned economy. 2. When voluntary exchange takes place, only one party gains from the exchange. 3. A college must decide if it wants to offer more evening and weekend classes. This decision involves answering the economic question of "for whom to produce."
Currently, the marginal cost equation for a shoe manufacturing company is given by MC = 10 + 2Q. The market price per pair is $60. How many units should the company produce?
What will be an ideal response?