A natural monopoly usually arises when
A) there are diseconomies of scale in an industry.
B) the government allows unrestricted access to a market.
C) there are large economies of scale relative to the industry's demand.
D) companies band together to form a larger company.
Answer: C
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The increasing popularity of hotdogs in a food joint has pushed up their price, making it unaffordable for many students living in the surrounding areas. This is an example of a ________
A) positive externality B) negative externality C) pecuniary externality D) free-rider problem
The theory of factor pricing uses supply-demand analysis.
Answer the following statement true (T) or false (F)
For a macroeconomist, the case for aggregation is based on two principles?1) the composition of demand and supply may not matter for some purposes, and 2)
a. during fluctuations markets normally move together. b. individual markets allocate resources efficiently. c. inflation, unemployment, and growth never go together. d. individual markets distribute income efficiently.
The ratio of government debt to GDP since 1940 indicates that the U.S. has mostly been:
a. a net creditor by at least 20% of the value it produces each year. b. a net creditor by at least 10% of the value it produces each year. c. a net borrower by at least 20% of the value it produces each year. d. a net borrower by at least 40% of the value it produces each year.