If the distribution of water is a natural monopoly, then (i) multiple firms would likely each have to pay large fixed costs to develop their own network of pipes. (ii) allowing for competition among different firms in the water-distribution industry is efficient. (iii) a single firm can serve the market at the lowest possible average total cost

Economic theory predicts that people make choices in a manner that

A) makes them well liked by others. B) makes them better off. C) reflects the fact that resources are unlimited. D) shows that they do not respond to monetary incentives.

Suppose that the government of Summerfield spends $2 trillion in 2015 and receives tax revenues of $1.5 trillion. Which of the following is TRUE?

A) Summerfield has a budget surplus of $0.5 trillion. B) Summerfield has a budget deficit of $0.5 trillion. C) Summerfield has a trade deficit of $0.5 trillion. D) Summerfield has a trade surplus of $0.5 trillion.