The reason an unregulated natural monopolist will produce at an economically inefficient quantity is
A) due to the fact that the monopolist will equate marginal cost with price to determine the output level.
B) due to the fact that the monopolist will equate average total cost with price to determine the output level.
C) that the price does not equal the true marginal cost of producing the good.
D) that the monopolist will produce a quantity greater than the minimum of the average total cost curve.
Ques. 2What are the key characteristics of a public good?
What will be an ideal response?
Ques. 3Which of the following is an example of an inverse relationship?
A) hours of study and test grade
B) calories eliminated from diet and weight loss
C) beers consumed while studying and test grade
D) amount of snowfall and profits of ski resorts
Ques. 4If the price of cotton used in making blue jeans increases, which of the following will occur?
A) There will be a movement along an unchanged supply curve for jeans.
B) The supply curve for jeans will shift rightward.
C) The supply curve for jeans will shift leftward.
D) There will be a rightward shift in the supply curve for jeans, followed by a movement along the supply curve.
Ques. 5The indirect effect of an increase in the money supply is to
A) raise interest rates so people will save more.
B) lower interest rates, which stimulates both investment and consumption spending.
C) put more cash in people's pockets, thereby increasing aggregate demand.
D) pay off a portion of the public debt.
Ques. 6What is meant by the concentration of an industry? How is concentration measured? What are likely causes of high concentration?
What will be an ideal response?
Ques. 7What is the underlying assumption of the original, simplified Keynesian model?
A) The relevant range of the short-run aggregate supply curve (SRAS) is vertical.
B) The relevant range of the aggregate supply curve (AS) is vertical.
C) The relevant range of the short-run aggregate supply curve (SRAS) is horizontal.
D) The relevant range of the long-run aggregate supply curve (LRAS) is horizontal.
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