The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. If Light-U-Up is regulated, what is its economic profit if it must follow a marginal cost pricing rule?
A) -$40
B) -$20
C) $0
D) $30
B
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In the traditional Keynesian model, an increase in current taxes
A) increases disposable income but does not affect consumption. B) decreases both disposable income and consumption. C) decreases disposable income but increases consumption. D) has no effect on either disposable income or consumption.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
Social Security benefits have played an important role in the improved economic status of the elderly over time.
A. True B. False C. Uncertain
An implicit cost is
a. any cost a firm cannot avoid in the short run b. any expenditure a firm makes c. an opportunity cost d. accurately measured in accounting statements e. ignored by economists