If a regulatory commission sets the regulated price equal to marginal cost for a natural monopoly:
a. losses will result.
b. government subsidies will be unnecessary.
c. the firm will earn economic profits.
d. new firms will want to enter.
e. resource use will not be optimal.
a
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Everything else held constant, in the market for reserves, when the demand for federal funds intersects the reserve supply curve on the vertical section, increasing the discount rate
A) increases the federal funds rate. B) lowers the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
A profit-maximizing firm will continue to expand output:
a. as long as the revenues from the production and sale of an additional unit exceeds the average cost of the unit. b. until the average cost of producing the good or service is at a minimum. c. as long as the revenues from the production and sale of an additional unit exceeds the marginal cost of the unit. d. until the marginal cost of producing a good or service is at a minimum.
The production possibilities curve can shift inward when
A) production increases. B) employment increases. C) the stock of productive capital rises. D) a country experiences a natural disaster.
Refer to the information provided in Figure 2.1 below for the economy of Macroland to answer the question(s) that follow. Figure 2.1Refer to Figure 2.1. Macroland's production possibility frontier is bowed out from the origin due to
A. decreasing opportunity costs. B. unemployment. C. specialized resources. D. trade.