A natural monopoly occurs when:
A. long-run average costs decline continuously through the range of demand.
B. a firm owns or controls some resource essential to production.
C. long-run average costs rise continuously as output is increased.
D. economies of scale are obtained at relatively low levels of output.
Answer: A
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According to this Application, when the states got into fiscal difficulties in the 1840s through overly ambitious infrastructure projects, the federal government
A) again bailed out all the states. B) did not bail out any of the states. C) bailed out only the northern states, but not the southern states. D) only bailed out the states which comprised the original 13 colonies.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.
Which of the following statements about scarcity is true?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources. B) Scarcity is not a problem for the wealthy. C) Scarcity is only a problem when a country has too large a population. D) Scarcity only arises when there is a wide disparity in income distribution.
Along a supply curve: a. supply changes as price changes
b. quantity supplied changes as price changes. c. supply changes as technology changes. d. quantity supplied changes as technology changes.