The rail system in Metropolis is a natural monopoly. If the government regulates the system by setting the fare equal to marginal cost, which of the following will be true?
a. The managers of the rail system will be allowed to adjust marginal cost so that they can get a normal rate of return on capital.
b. The managers of the rail system will be allowed to adjust marginal cost so that they can get a fair profit.
c. The rail system will earn economic profit at that fare.
d. If the government doesn't give the rail system a subsidy to supplement revenue from fares, the system will face continuous economic losses.
e. If the government doesn't give the rail system a subsidy to supplement revenue from fares, fare increases will push marginal cost upward.
D
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Refer to the table above. If the world price for a pair of trousers is $12, then which of the following statements is true?
A) All the four countries will export trousers. B) All the four countries will import trousers. C) Country A and Country B will import trousers, whereas Country C and Country D will export trousers. D) Country C and Country D will import trousers, whereas Country A and Country B will export trousers.
The ____________ was designed to raise revenue and achieve mercantilist goals, while the ____________ was simply intended to raise revenue
a. Sugar Act; Tea Act b. Tea Act; Molasses Act c. Sugar Act; Stamp Act d. Stamp Act; Hat Act
The supply of seats for an economics class at 10 a.m. is the same as the supply of seats for the same class at noon. Every student who wants to attend this class at noon can, but not every student who wants to attend the 10 a.m. class can. Tuition does not vary by time. It follows that the demand for the 10 a.m. class is __________ the demand for the noon class
A) lower than B) the same as C) greater than D) either a or b E) none of the above
The government's budget deficit refers to the:
A. Total amount of debt that the government has incurred over the years B. Difference the nation's amount of exports and its total amount of imports C. Gap between high government spending and its lower tax revenues D. Decrease in the amount of government spending form one year to the next