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3 years ago

Explain how and why governments may want to regulate the price setting of a natural monopoly.

1 answer:

8 0

The government wants to protect the consumer's interest, that is why they are regulating the monopoly. Monopolies have the power to set higher prices than the competitive market. They regulate monopolies to prevent excess prices, quality of service( to ensure the firm receives minimum standard of service), monopoly power,promote competition, and natural monopolies( we cannot encourage competition, and it is essential to regulate firm to prevent monopoly of power).

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The board of governors of the federal reserve system can increase commercial bank reserves by

Marina CMI [18]

The board of governors of the federal reserve system can increase commercial bank reserves by increasing the size of its term auction facility.

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3 years ago

Economics is hard and I need to graduate

AfilCa [17]

Answer: Opportunity cost

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3 years ago

Jonathan Crowley is a portfolio manager for a large pension fund. Last year his portfolio had an actual return of 12.6% with a s

ycow [4]

Answer:

The required rate of return of the portfolio is 13.62%

Explanation:

The required rate of return is the minimum return that investors require to invest in a stock or portfolio. The required rate of return can be calculated using the CAPM formula for required rate of return. The formula is,

r = rRF + Beta * rpM

Where,

rRF is the risk free rate
beta is the stock/portfolio's beta or measure of risk
rpM is the risk premium on market

r = 5.82% + 1.3 * 6%

r = 0.1362 or 13.62%

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3 years ago

Suppose you have just landed a job near the center of a city and you now need to decide where to live. If you live close to the

Tomtit [17]

Answer:

Since there are only a limited number of apartments near the city center, these apartments will be allocated based on BOTH THE COSTS AND BENEFITS. This process is known as OPTIMIZATION.

Explanation:

Optimization refers to calculating the change in net benefits between alternative choices, and choosing the alternative that provides the most benefits at the lowest costs.

For example, the cost of an apartment downtown will be much higher if measured as $ per square foot, but the advantage of saving 90 minutes of travel time a day might justify the extra cost.

If you are married and have children, then the extra cost of living downtown might be too high due to the amount of space needed for the whole family, therefore, it might be cheaper to spend 90 minutes a day travelling than paying an extremely high rent.

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2 years ago

If demand is inelastic, a drought around the world would ___the total revenue that farmers receive from the sale of grain.

Elena L [17]

Answer:

Raises ;

C. A drought in Kansas is not significant enough to affect the worldwide price of grain.

Explanation:

Drought is a situation where there is shortage of water due to prolong absence of rainfall.

This is because, when Kansas has a drought, purchasers or buyers can substitute wheat from other places for Kansas wheat.

But, when the whole world has a drought, purchasers or buyers have no other suppliers of wheat to substitute. This means that, no area will have wheat so that the buyers can buy, because every area will be affected by the drought.

In this case,the demand for wheat is inelastic in the short run.

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3 years ago

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