Natural monopoly exists when
a. marginal costs are less than average costs for all output levels
b. average costs are less than marginal costs for all output levels
c. profit is impossible for a private firm
d. efficient production is impossible for a private firm
e. none of the above
Question 2 - One of the problems with Lewis' concept of surplus labor is that
a. People who look like they are not working actually are achieving important development objectives.
b. Productivity in subsistence agriculture is so low that all workers are constantly needed.
c. Those no longer needed in agriculture have long ago left for the cities.
d. Those whose labor is not needed at one time may be needed at other times.
e. Surplus labor exists only in developed country agriculture.
Question 3 - If a central bank is said to be leaning against the wind, they have signaled that they will
A) intervene to reverse the current trend of their currency.
B) intervene to accelerate the current trend of their currency.
C) not intervene in the currency markets at all.
D) work together with their opposition even if it is politically difficult.
Question 4 - In recent years, the fertility rate in developing countries has been
(a) declining.
(b) holding steady.
(c) increasing.
(d) showing no particular pattern.
Question 5 - A planned economy would require decisions on the basis of
a. input-output tables
b. corporate profits
c. cost-benefit analysis
d. government decisions
e. all of the above
Question 6 - Rostow's stages of growth concept could be improved by
a. demonstrating how a country moves from one stage to the next
b. showing when different countries achieved a take-off
c. illustrating the industries that could be leading sectors
d. identifying the investment-to-income ratio that is typical for each stage
e. specifying necessary investment and savings levels
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