Under rate of return regulation, a natural monopoly ________
A) has an incentive to inflate its costs
B) has an incentive to deflate its costs and capture more of the market
C) makes an economic profit
D) sets price equal to marginal cost
A
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With respect to the financial crisis of 2007-2009, some economists argue that financial service firms should have done a better job of assessing the risk involved in investing in mortgage-backed securities
Better governance in this context refers to which of the following? A) improving the assessment of investments. B) improving the monitoring of investments. C) improvements in aligning the actions of top managers with the preferences of shareholders D) all of the above
Consider the relationship given by QCars = 100 + 4 × PCars - 2 × PSteel - 0.2 × PWorkers, where QCars is the quantity of cars supplied (in thousands), PCars is the price of cars (in thousands of dollars), PSteel is the price of steel, and PWorkers is the wage earned by autoworkers. If the price of steel is $10 per unit and the price of workers (the wage) is $20, how many cars will be supplied if the price of cars is $20,000?
A. 96,000 B. 156,000 C. 204,000 D. 960,000
An increase in the interest rate will increase the demand for loanable funds
a. True b. False Indicate whether the statement is true or false
Price indexes like the CPI are calculated using a base year. The term base year refers to:
a. the first year that price data are available. b. any year in which inflation was higher than 5 percent. c. the most recent year in which the business cycle hit the trough. d. an arbitrarily chosen reference year.