The Massachusetts Turnpike is a state toll-road where cars and trucks pay a fee in proportion to the distance they travel and the weight of the vehicle. The road was built with federal funds in the 1960s, but the state must pay for maintenance. Given what you know about regulation, what do you think the toll charge for a particular car or truck represents?
a. the average variable cost of maintenance
b. the marginal cost of maintenance
c. the monopoly price
d. price discrimination against bus passengers
e. a lump-sum tax
B
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Refer to Figure 15-3. What happens to the monopolist represented in the diagram in the long run?
A) It will be forced out of business by more efficient producers. B) It will raise its price at least until it breaks even. C) If the cost and demand curves remain the same, it will exit the market. D) The government will subsidize the monopoly to enable it to break even.
What is the importance of measuring per capita GDP?
The table below shows the consumption schedule for a hypothetical economy. All figures are in billions of dollars.RGDPConsumption$600$590610598620606630614640622650630660638If investments were fixed at $12, taxes were zero, government purchases of goods and services were zero, and net exports were zero, then equilibrium real GDP would be $610 initially. If government purchases were then raised from $0 to $4, other things constant, the equilibrium real GDP would become
A. $630. B. $640. C. $650. D. $660.
The value of the best alternative sacrificed to obtain something you want is referred to as
A. opportunity cost. B. tangible cost. C. accounting cost. D. explicit cost.