Is it possible for the economy to be at full employment and still have some people who are unemployed?
A) No, full employment means that no one is unemployed.
B) Yes, since full employment exists if the economy is operating at the natural unemployment rate and there is always some natural unemployment.
C) Yes, since full employment exists if the economy is operating at the frictional unemployment rate and there is always some frictional unemployment.
D) Yes, since full employment equals the sum of the cyclical unemployment rate and the natural unemployment rate, and there is always some cyclical unemployment.
E) none of the above
B
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People who need life-saving drugs cannot do without them and surely will be willing to pay very high prices for them. So why can't producers of life-saving drugs charge any price that they wish?
What will be an ideal response?
If a public service commission requires a natural monopoly to set its price equal to the long-run marginal cost, this will result in
A) excessive economic profits to the monopoly. B) normal economic profits to the monopoly. C) losses to the monopoly. D) either economic profits or losses, depending on the efficiency of the monopoly.