Author Question: The Chicago Heights school district study found that A) teachers have a low occurrence of moral ... (Read 115 times)

nevelica · **on:** Jun 29, 2018

The Chicago Heights school district study found that

A) teachers have a low occurrence of moral hazard.
B) students did much better with a teacher who received merit pay.
C) adverse selection results among teachers with poor students.
D) teachers did not response to pay incentives.

Question 2

When a natural monopoly is regulated using a marginal cost pricing rule, what can you say about the firm's profit and the market's efficiency?

What will be an ideal response?

jessofishing · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

Using a marginal cost pricing rule, the monopoly is incurring an economic loss. However, there is an efficient quantity of output produced so that the market is efficient with no deadweight loss.