Rate of return regulation, as currently applied to many natural monopolies such as public utilities,
A) generally involves the use of price caps.
B) gives the firms an incentive to inflate their costs.
C) gives the firms an incentive to cut their costs as much as possible.
D) generally keeps their prices higher than if they were unregulated monopolists.
B
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A fall in the domestic interest rate leads to capital
A. outflows and exchange rate appreciation. B. outflows and exchange rate depreciation. C. inflows and exchange rate depreciation. D. inflows and exchange rate appreciation.
In the figure above, 10 percent of income in country C is distributed to the
A) richest 10 percent of the households. B) poorest 10 percent of the households. C) poorest 30 percent of the households. D) poorest 70 percent of the households.
A monopolist is maximizing profit at an output rate of 1,000 units per month. At this output rate, the price that its customers are willing and able to pay is $8 per unit, average total cost is $5 per unit, and marginal cost is $6 per unit
It may be concluded that at this monthly output rate, marginal revenue is A) $5 per unit, and the monopolist earns zero economic profits. B) $6 per unit, and the monopolist earns economic profits of $2,000 per month. C) $6 per unit, and the monopolist earns economic losses of $1,000 per month. D) $6 per unit, and the monopolist earns economic profits of $3,000 per month.
Suppose the Fed sells $100 million of U.S. securities to the security dealers. If the reserve requirement is 20 percent, the currency holdings of the public are unchanged, and banks have zero excess reserves both before and after the transaction, the total impact on the money supply will be a:
a. $100 million decrease. b. $500 million increase. c. $500 million decrease. d. $100 million increase.