Which of the following statements is correct?
a. Public ownership is preferred to regulation in order to minimize the dead weight losses associated with natural monopolies
b. Antitrust laws are always the best way to limit monopoly power.
c. It is possible that the best approach to monopolies is for the government to do nothing.
d. Marginal-cost pricing requires a natural monopoly to earn zero economic profits..
Ans: c. It is possible that the best approach to monopolies is for the government to do nothing.
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Assume a U.S. firm invests $1,500 to buy a one-year U.K. bond. What is the dollar value of the proceeds if the dollar return on the U.K. bond is 20 percent at maturity?
a. $1,800 b. $1,500 c. $1,200 d. $1,000 e. $500
Suppose the Dow Jones Industrial Average has risen for three days in a row. According to the efficient markets theory of stock prices,
a. it will probably fall again tomorrow b. it will probably rise tomorrow to compensate for recent losses c. it is more likely to rise tomorrow than if it had fallen three days in a row d. it is just as likely to rise again tomorrow as if it had fallen three days in a row e. it will most likely remain unchanged tomorrow
The aggregate supply curve is positively sloped because as the price level increases:
A. Profit margins increase in the short run. B. Costs of production decline in the short run. C. The purchasing power of money increases. D. The cost of borrowing declines.
If a country that has experienced political instability (coups, revolutions, etc.) begins to experience a stable period of elections and peaceful transitions of government, it will impact its economy by
A. increasing aggregate supply. B. increasing aggregate demand. C. decreasing aggregate demand. D. Increasing both aggregate demand and aggregate supply.