Refer to the diagram for a specific economy. An increase in aggregate demand will:
A. shift this curve to the right.
B. shift this curve to the left.
C. move this economy down and to the right along the curve.
D. move this economy up and to the left along the curve.
D. move this economy up and to the left along the curve.
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Critics of the regulation of natural monopolies contend that:
A. regulation increases the incentive of firms to lower costs. B. regulated firms may use creative accounting to reduce costs, prices, and profits. C. when rates of return are based on the value of real capital, an uneconomic substitution of labor for capital may occur. D. the industry may "capture" or control the regulatory commission.
Refer to Figure 5-3. In the absence of any government intervention, the private market
A) underproduces by Qo - Qm units. B) underproduces by Qn - Qm units. C) overproduces by Qn - Qm units. D) overproduces by Qo - Qm units.
In the short run, the profit-maximizing monopolistically competitive firm will produce the rate of output at which
A) P = MC. B) MR = MC. C) P = ATC. D) MR = ATC.
Game theory can be used to investigate
a. why cartels break down. b. why some firms maintain excess productive capacity. c. how oligopolists set prices. d. All of the above are correct.