Who gains from a law requiring people who want to enter the taxicab business to prove they are thoroughly competent, honest, and reliable before they can obtain a license?
A) Local people who use taxicabs frequently and regularly
B) Local people who use taxicabs only occasionally
C) Out-of-town visitors who use taxicabs
D) Owners of taxicab licenses
E) Potential owners and operators of taxicabs who are members of minority races
D
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One answer to the problem of natural monopoly is provision of the good by a government-owned and operated firm. Why is that option not used very often?
Suppose the interest rate on six-month treasury bills is 7 percent per year in the United Kingdom and 4 percent per year in the United States. Also, today's spot exchange price of the pound is $2.00 while the six-month forward exchange price of the pound is $1.98. U.S. investors expect that the future spot rate of pounds will be $2.04. By investing in U.K. treasury bills rather than U.S. treasury bills, and NOT covering exchange-rate risk, the approximate extra return that U.S. investors expect to earn for six months is
A. 5.0 percent. B. 3.0 percent. C. 3.5 percent. D. 0.5 percent.