A natural monopoly is a desirable market structure because
A. It allows the producer to deliver products to the market at the lowest possible cost.
B. It allows the producer to earn greater profit than is possible under competition.
C. The jobs it creates pay higher wages than those in a competitive industry.
D. It allows the producer to deliver a higher-quality product to the market.
Answer: A
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Income inequality in the United States has increased in part due to globalization. How does globalization contribute to income inequality?
A) It reduces the cost of producing goods and therefore lowers the value of labor services. B) It allows domestic firms to hire low-skilled workers anywhere in the world, putting U.S. workers in competition with foreign workers. This has caused the wages of low-skilled workers to fall relative to the wages of other workers. C) It increases the demand for a wide variety of products which in turn increases prices beyond the reach of average-income households. D) It allows producers to exploit workers and reduce the wages they are willing to pay those workers.
According to the interest-rate effect, an increase in the price level will
a. increase money demand and interest rates. Investment declines. b. increase money demand and interest rates. Investment increases. c. increase money demand, reduce interest rates, and investment increases. d. decrease money demand and interest rates. Investment declines.
In the United States, all money is essentially the debt of government, commercial banks, and thrift institutions.
Answer the following statement true (T) or false (F)
The minimum efficient scale of a firm:
A. is realized somewhere in the range of diseconomies of scale. B. occurs where marginal product becomes zero. C. is in the middle of the range of constant returns to scale. D. is the smallest level of output at which long-run average total cost is minimized.