When a firm experiences steadily declining long-run average total costs as it produces more output, it is known as a(n)
A) oligopoly.
B) rent seeker.
C) natural monopoly.
D) monopolistic competitor.
C
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A market with a negative externality
a. will be regulated by the government b. is an example of a natural monopoly c. will be Pareto efficient, as long as bargaining costs are high enough d. will produce less than the efficient quantity, thereby creating a welfare loss e. will produce more than the efficient quantity, thereby creating a welfare loss
A consumer chooses an optimal consumption point where the
a. marginal rate of substitution exceeds the relative price ratio. b. slope of the indifference curve equals the slope of the budget constraint. c. ratio of the prices equals one. d. All of the above are correct.
Which of the following is true?
A. A variable has a causal effect on another variable if both variables increase or decrease simultaneously. B. The notion of ‘ceteris paribus' plays an important role in causal analysis. C. Difficulty in inferring causality disappears when studying data at fairly high levels of aggregation. D. The problem of inferring causality arises if experimental data is used for analysis.
An indexed payment is one
A. whose real value changes with the rate of change in the price level. B. whose nominal value is held constant. C. whose dollar value changes with the rate of change in the price level. D. whose nominal value is equal to its value.