Which of the following statements about natural monopolies is true?
A) Natural monopolies are only found in the markets for natural resources (like crude oil and coal).
B) For natural monopolies, marginal cost is always below average cost.
C) For natural monopolies, average cost is always increasing.
D) Natural monopolies cannot be regulated.
B
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If nominal GDP in 2012 was less than real GDP in 2012, we know for certain that
A) the price level in 2012 was greater than the price level in the base year. B) real GDP in 2012 was greater than real GDP in the base year. C) the price level in 2012 was less than the price level in the base year. D) real GDP in 2012 was less than real GDP in the base year.
Answer the following statements true (T) or false (F)
1. The income and substitution effects will both induce the consumer to buy more of a normal good when its price decreases. 2. Someone who pays $800 to fly from one city to another instead of paying only $100 for a bus trip between the two cities is making an irrational choice and is thus not maximizing his utility. 3. If consumers are convinced by ads that Brand X has a lot more value than they originally thought, then the MU/P of X will decrease. 4. The budget line shows all the combinations of two products which the consumer can buy, given money income and product prices. 5. If the quantity of X is measured on the horizontal axis and the quantity of Y on the vertical, then the slope of the budget line is equal to the price of X divided by the price of Y.