Average cost regulation of a natural monopoly:
a. generates economic losses for the seller
b. necessitates a subsidy payment to the firm.
c. creates incentives that tend to shift ATC curves in an upward direction.
d. imposes a price that is less than marginal cost.
c
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The "solvency condition" states that the debt-GDP ratio will rise continuously so long as
A) the real GDP growth rate exceeds the real interest rate. B) the real interest rate exceeds the real GDP growth rate. C) the real interest rate exceeds the nominal interest rate. D) the nominal interest rate exceeds the cost of borrowing.
A game includes
A) a strategy. B) payoffs. C) rules. D) All of the above.
Direct marketing is
A) advertising that permits a consumer to follow up directly by searching for more information and placing direct product orders. B) advertising that targets a specific audience and allows the consumer to follow up directly by placing direct product orders usually through television or radio. C) advertising targeted at specific consumers. D) advertising intended to reach as many consumers as possible.
The condition P = MC implies that
A. there is no consumer surplus for any consumer. B. the amount of consumer surplus is infinite. C. an individual who values the product at more than P will receive consumer surplus. D. an individual who values the product at less than P will receive consumer surplus.