A natural monopoly exists when
a. economies of scale are negligible
b. there are a few dominant firms that corner the market
c. one firm can produce the market output at lower average cost than two or more firms can
d. barriers to entry are low
e. only a few firms can minimize cost and maximize profit
C
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Capital gains are
A. treated exactly like other sources of income. B. taxed differently than other sources of income. C. generally not associated with a "lock-in effect." D. only realized at death.
Wages that are "sticky":
A. pull other prices up or down with them when they change. B. have not changed, in real terms, for decades. C. are stuck where they are and fail to adjust downwards in a recession. D. are pegged to other variables, such as product prices.
Figure 18.2Refer to Figure 18.2. In autarky, the maximum amount of spears that Macadamia can produce is:
A. 40. B. 100. C. 120. D. 160.
The Fed
A) can easily distinguish the minor ups and downs of the economy from a recession. B) can have difficulty distinguishing the minor ups and downs of the economy from a recession. C) always times its policy responses correctly. D) can easily determine if a drop in production means a recession is inevitable.