Other things equal, a decrease in government spending ________ the equilibrium interest rate and ________ equilibrium output.
A. decreases; decreases
B. decreases; increases
C. increases; decreases
D. increases; increases
Answer: A
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Which of the following is true under natural monopoly?
a. The marginal cost curve will be above the average cost curve. b. The monopolist will set price equal to marginal cost and will earn economic profits. c. Economies of scale will be present. d. Output is produced under conditions of constant cost.
If the central bank decreases the supply of money, then the aggregate demand curve will:
a. become steeper. b. shift to the right. c. become flatter. d. shift to the left.
Figure 9.6 represents the market for health insurance. Suppose there are two types of consumers, low-cost consumers with $2,000 average medical expenses per year, and high-cost customers with $4,000 average medical expenses per year. The insurance companies estimate that 40% of its customers are high-cost type. If the insurance companies set the price equal to their average cost per customer, what percent of customers who buy the insurance are actually low-cost customers?
A. 20% B. more than 20% but less than 50% C. more than 50% D. less than 20%
Refer to the information provided in Figure 15.2 below to answer the question(s) that follow. 
Figure 15.2 Refer to Figure 15.2. If We Do Hair maximizes profits as a monopolistically competitive firm, its ________ equals $1,280.
A. total cost B. total revenue C. profit D. loss