Discuss the following statement: "In a competitive marketplace the least-cost production
1. Discuss the following statement: "In a competitive marketplace the least-cost production techniques are revealed by entry also exit, while in public utility regulation they are revealed by commission rate hearings. It is easier to fool the commission than the marketplace. Therefore whenever possible, competition should be permitted."
2. "Debtors are exploited by creditors because a person who has to borrow is usually in distress also is willing to pay a very high price to get the loan. Unless laws were passed controlling the rate of interest, debtors would be forced to pay unreasonable rates of interest." Is the analysis correct? Elucidate why or elucidate why not.
3. Both monopolists' also purely competitive industries are supposed to behave as if they seek to maximize profits, yet monopoly is held to result in an inefficient allocation of resources as compared to pure competition. Elucidate. Marginal costs serve as a guide as to explain how much of a good product, while average variable costs help indicate whether to produce at all. Elucidate.
4. The National teachers Federation, a teachers union, advocates a single salary scale wherein every teachers, regardless of specialty, gets the same salary his first yr of teachers, with salary thereafter tied strictly to yrs of service. Who would suffer (Elucidate why) also who would benefit (Elucidate why) if which were made universal: Men or women? Negroes or whites? Superior or inferior teachers? Mathematics or physical-education teachers?