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What is a “natural monopoly”?
a) Why is it the case that the market system cannot deliver a sustainable competitive equilibrium in the case of a “natural monopoly”.
b) What, in your view is likely to be the most attractive option for how the government should deal with cases of natural monopoly?
c) Why does this option strike you as more attractive than the other options you can think of?
What effect, if any, does each of the following events have on the price elasticity of demand for corporate-owned jets?
When Alex's income was $3000, he bought 4 bagels and 12 donuts a month. Now hus income is $5000 and he buys 8 bagels and 6 donuts a month. Calculate Alex's income elasticity of demand for a. Bagel b. Donuts
Suppose there are two firms that produce sulfur dioxide emissions, Firm A and Firm B. Each firm emits 30 tons of sulfur dioxide per year. The cost of reducing one ton of sulfur is $200 for Firm A and $250 for Firm B. If Firm B emits 60 tons of sulfur..
Other things equal, what effect will each of the following have on the equilibrium price level and the level of real output?
The market for DVD rentals in Dallas, Texas, is estimated to be P= 10-0.002Q. Marginal cost (MC) of rental is equal to $2. Where PD is the price (per DVD in $) for DVD QD is quantity of weekly rental. The marginal revenue (MR) for rental is equal to
Examine the first diagram showing the monthly production possibility frontier for the Tivoli and the monthly production possibility frontier for the Frivoli. Which tribe now has an absolute advantage in producing spaghetti? Which has the comparative ..
Discuss the international parity conditions. Explain the essence of purchasing parity power. What would happen to purchasing parity power exchange rate if the law of one price were true? What is the difference between the purchasing parity power and ..
Comment on the following statement: “The free market allows hospitals to enter markets too easily; and regulators can potentially improve social well-being by restricting entry.”
If your analysis period (study period) is just three years, what should be the salvage value of project A2 at the end of year 3 to make the two alternatives economically indifferent?
Describe the process in the money market (demand and supply of/for money) by which the interest rate reaches its equilibrium value if it starts above equilibrium.
If the rr is equal to 5%, what is the value of the money multiplier (simple deposit multiplier)? If $30,000 in cash is taken from under your mattress and deposited into a bank, predict the impact on the money supply in the economy.
Government sometimes restricts international borrowing and lending by taxing them. In a two-period, two-country endowment model, if the Home's position is r^A
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