Regulated natural monopolies can obey a marginal cost pricing rule and still make a normal profit by engaging in
A) least cost pricing and average cost pricing.
B) price discrimination and two-part tariff pricing.
C) zero profit pricing.
D) profit-maximizing pricing.
E) None of the above answers is correct because a natural monopoly regulated using a marginal cost pricing rule always incurs an economic loss.
B
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During World War II the United States' economy grew by about ________ percent a year.
A. 5 B. 10 C. 15 D. 20
A significant problem of a dual exchange rate system is that it
(a) is difficult to administer. (b) leads companies to pursue rent-seeking behavior. (c) promotes black markets. (d) all of the above. (e) none of the above.
President George W. Bush and congress cut taxes and raised government expenditures in 2003 . According to the aggregate supply and aggregate demand model
a. both the tax cut and the increase in government expenditures would tend to increase output. b. only the tax cut would tend to increase output. c. only the increase in government expenditures would tend to increase output. d. neither the tax cut nor the increase in government expenditures would tend to increase output.
The gains to monopolists from exercising market power:
A. exceed the losses to consumers in monopoly markets, resulting in a net gain to society. B. equal the losses to consumers in monopoly markets, resulting in no net change for society. C. are less than the losses to consumers in monopoly markets, resulting in a net loss to society. D. create smaller deadweight losses than occur in purely competitive industries.