For the purpose of defining economic income, capital gains count as income only when they are realized.

When an average cost pricing rule is imposed on a natural monopoly, ________

A) total surplus is maximized and the monopoly incurs an economic loss B) the monopoly makes zero economic profit C) the monopoly makes an economic profit D) total surplus is maximized and the monopoly makes an economic profit

Which of the following is true of the present value of an investment?

a. The higher the rate of interest the higher will be the present value of an investment. b. Present value of an investment is an increasing function of the time period of investment. c. The longer the time period of investment the lower will be its present value. d. Present value falls less than proportionately with the length of the delay in payment.