Answer the following statement(s) true (T) or false (F)
1. For a given quantity, a monopoly's marginal revenue is always greater than the price associated with that quantity.
2. When regulating a natural monopoly one should set the regulatory price such that the monopoly will produce the efficient level of output.
3. Deadweight loss because of a monopoly can be attributed to the fact that monopolies produce at a quantity where the price of the good exceeds the marginal cost of producing the last unit.
4. When there are significant differences among customers, a monopolist will look for opportunities to price discriminate.
5. Distributing goods equally among consumers would be not only fair but efficient.
1. False
2. False
3. True
4. True
5. False
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Which geographic coincidence affected gasoline prices the most during 2005?
A. A tsunami hit the one area in the world most responsible for producing U.S. gasoline, Indonesia. B. Two major hurricanes affected the refining intensive areas of New Orleans and Houston. C. An earthquake happened to hit the energy-sensitive areas in and around Iran. D. There were tornado related electrical outages in the industrial Midwest.
With positive externalities, _____
a. the market equilibrium occurs at a greater quantity than the socially optimal output b. net social welfare is maximized c. the social benefit curve lies above the private benefit curve d. there is no deadweight loss
Deposit insurance is a system in which the government guarantees that:
A. commercial banks will not go bankrupt. B. people can have deposits at commercial banks. C. commercial banks will not lose any deposits. D. depositors will not lose any money even if their bank goes bankrupt.
What options have been suggested for shoring up the finances of Social Security and Medicare? Why are they unpleasant ones to consider?
What will be an ideal response?