A natural monopoly's output is less if it is regulated with
A) a marginal cost pricing rule than if it is unregulated.
B) an average cost pricing rule than if it is unregulated.
C) an average cost pricing rule than if it is regulated with a marginal cost pricing rule.
D) a marginal cost pricing rule than if it is regulated with an average cost pricing rule.
E) More information about the firm's demand is needed to determine how its output depends on what regulation it faces.
C
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In spite of less-than-optimal currency area criteria at present in the Eurozone, some believe that the existence of a working currency union will result in:
A) an improvement in the criteria, as the union members are committed to work for more integration. B) a gradual deterioration of the union, as members seek benefits from having an autonomous monetary policy. C) tension and a power struggle over which will be the dominant economy in the union. D) more delay in implementing needed reforms.
From the banker's perspective, dollars held as required reserves in bank vaults
A) earn a low rate of interest. B) earn no rate of interest. C) earn a market rate of interest. D) earn profits.