What were the two basic means of control by government as substitute for, or to supplements to, market forces in monopolized industries?
What will be an ideal response?
First, regulatory agencies were formed to control the economic behavior of natural monopolies. Second, antitrust legislation was passed to inhibit or prevent the growth of monopolies in other industries.
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U.S. imports are
a. not added to U.S. GDP because they are produced abroad b. added to U.S. GDP because they are consumed domestically c. added to U.S. GDP because they represent an increase in inventories d. added to U.S. GDP as government purchases because the government decides what goods may be imported e. not added to U.S. GDP because they are intermediate goods
If the internal rate of return from an investment is more than the opportunity cost of funds the firm should:
A. not make the investment. B. only make the investment using retained earnings. C. make the investment. D. only make part of the investment and wait to see if interest rates decrease.
What would happen in the market for prescription drugs if people begin to view over-the-counter remedies as a good substitute for prescription medications?
A. The demand for prescription medications will decrease. B. Prescription medications will become an inferior good. C. There is a downward movement along the demand curve for prescription medications. D. There is an upward movement along the demand curve for prescription medications.
The Social Security program is financed directly from
A) voluntary contributions by the elderly. B) sales taxes on goods with inelastic demand. C) payroll taxes. D) poll taxes.