Consider a cable TV company which is subject to an average-cost pricing regulation. If the number of subscribers decreases:
A. the company will have to operate at a smaller profit unless it suffers an economic loss.
B. the company will have to charge a relatively low price as the demand curve facing the firm shifts to the left.
C. the company will charge more per customer as its average cost increases.
D. None of these
Answer: C
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To make sure that no one group could dominate the direction of monetary policy, the 1913 Federal Reserve Act diffused power in all of the following ways except
A) geographically. B) between the public and private sectors. C) internationally. D) within the government.
Unlike Classical growth theory, new growth theory emphasizes the importance of:
A. the law of diminishing marginal productivity. B. population growth. C. human capital. D. technology.
According to the economic way of thinking, "money" is defined as
A) anything backed by gold. B) anything backed by some other commodity. C) anything used as a general medium of exchange. D) anything the government declares to be legal tender.
Which of the following is true of the typical relationship between marginal product (MP) and average product (AP)?
A) If MP is greater than AP, then AP is falling. B) The AP curve intersects the MP curve at minimum MP. C) The MP curve intersects the AP curve at maximum AP. D) If MP is less than AP, then AP is increasing.