A natural monopoly exists when
A) diseconomies of scale exist in an industry.
B) one firm can supply an entire market at a lower average total cost than can two or more firms.
C) a firm can engage in price discrimination.
D) the producers in an industry have formed a cartel.
E) a monopoly firm faces a horizontal demand curve.
B
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Which of the following statements is TRUE?
A) At the efficient quantity, marginal social benefit equals marginal social cost. B) Marginal social cost increases as the quantity produced decreases. C) Marginal social benefit decreases as the quantity consumed decreases. D) If marginal social benefit exceeds marginal social cost by as much as possible, production is efficient.
If disposable income falls by $50 billion and consumption falls by $40 billion, then the slope of the consumption function is
A) 1.20. B) 0.80. C) 0.70. D) 0.10.
Everything else held constant, if aggregate output is to the ________ of the IS curve, then there is an excess supply of goods which will cause aggregate output to ________
A) right; fall B) right; rise C) left; fall D) left; rise
An example of acquired comparative advantage is that
A. the U.S. government provides a subsidy to firms that are trying to increase their exports to other countries. B. the United States imports coffee beans because coffee beans cannot be grown in the United States. C. some U.S. consumers prefer German cars over American cars because German cars have a reputation for being very safe. D. China specializes in the production of labor-intensive goods because of the amount of labor available in the country relative to capital.