Which of the following is not a power of the Federal Reserve System?
a. Setting the prime interest rate
b. Issuing Federal Reserve notes
c. Buying and selling U.S. government securities
d. Extending loans to member banks
e. Clearing checks
a
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The rail system in Metropolis is a natural monopoly. If the government regulates the system by setting the fare equal to marginal cost, which of the following will be true?
a. Profit will be zero under regulation. b. Only normal profit will be earned under regulation. c. Accounting profit will be zero under regulation. d. Economic loss will occur under regulation. e. Profit will be higher than if the monopoly were unregulated.
If a boxing fight is shown on pay-per-view television every Saturday at 4pm, the demand curve for each fight is given below.
If the regulated pay-per-view charge to watch a fight were $15 per household, then ________ households would watch the fight, and the loss is total economic surplus would be ________ relative to when there is no charge to watch the fight.
A. 10 million; $225 million B. 10 million; $25 million C. 20 million; $25 million D. 20 million; $225 million
Some suggest that when economists claim to be thinking ________, they are ________.
A. positively; deluding themselves B. negatively; deluding themselves C. normatively; really thinking positively D. normatively; deluding themselves
An increase in household income for a good that is considered inferior would
A. move its demand curve to the right. B. cause a movement along the demand curve to a (lower price, higher quantity) point. C. move its demand curve to the left. D. cause a movement along the demand curve to a (higher price, lower quantity) point.