Which of the following is true of basic research?
a. Basic research is the search for knowledge that does not aim at answering a specific question.
b. Basic research is research that is not complex since it addresses elementary questions.
c. Basic research is research that seeks to apply scientific discoveries to the development of specific products.
d. Basic research is the search for knowledge to solve a particular problem.
e. Basic research is always funded by the central government of a country.
QUESTION 2A local cable company has its rates set at P = 15 by a regulatory commission. Its current output is 10,000 households and its costs are as follows: ATC = 17; AVC = 14; and MC = 15 . From this, we can tell that this is:
a. a fair price, and the firm earns a normal profit.
b. a fair price, and the firm earns an economic loss.
c. marginal cost pricing, and the firm earns a normal profit.
d. marginal cost pricing, and the firm earns an economic loss.
e. the same price that an unregulated monopolist would charge.
QUESTION 3Money market mutual funds:
a. offer higher rates of interest than bank checking accounts, but lack check-writing privileges.
b. offer higher rates of interest than bank checking accounts and also offer limited check-writing privileges.
c. usually pay lower rates of interest than bank checking accounts.
d. were originally developed and offered by banks to their customers.
e. usually do not offer any check-writing privileges.
QUESTION 4Which of the following is an example of basic research?
a. Conducting animal tests to determine if a product contains irritants
b. Soft drink bottlers testing consumer reactions to their advertisements
c. A statistician calculating the odds of winning a promotional sweepstakes that a company is running
d. A catalog sales company timing its operators to see how many calls each is handling per day
e. A chemist building a mathematical model of the atmosphere of Jupiter
QUESTION 5If 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.
QUESTION 6Which of the following statements is true?
a. Money market mutual funds were originally introduced by the Federal Reserve Bank of New York.
b. Money market mutual funds initially constituted serious competition to banks and thrifts for the deposits of savers.
c. Money market mutual funds were not originally offered by commercial banks and still are not offered by them.
d. Money market mutual funds represent a pooling of cash assets from many countries, like dollars, francs, and pesos.
e. Money market mutual funds are not able to offer their customers check-writing privileges.
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