The figure above shows a natural monopoly that the government must regulate. If the government uses ________, the firm produces ________ units per week
A) the HHI; 50
B) an average cost pricing rule; 30
C) rate of return regulation; 40
D) social interest regulation; 30
E) a marginal cost pricing rule; 20
B
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The United States has an absolute advantage in producing sugar over all of the other sugar producing countries. Does this fact mean that we should not import any sugar from the other countries?
What will be an ideal response?
The tariff levied in a "large country" (Home), lowers the world price of the imported good. This causes
A) foreign consumers to demand less of the good on which was levied a tariff. B) domestic demand for imports to decrease. C) domestic demand for imports to increase. D) foreign suppliers to produce less of the good on which was levied a tariff. E) no change in the foreign price of the good it imports.
For which of the following products would price discrimination be easiest?
a. orange juice b. diamonds c. compact disks d. haircuts e. gasoline
Long-run equilibrium in the goods and services market requires that
a. aggregate supply equals aggregate demand and that decision makers correctly anticipate the level of prices. b. the unemployment rate is zero. c. prices are neither increasing nor decreasing. d. aggregate supply be larger than aggregate demand.