The Chicago Heights school district study found that A) ...

[nevelica]

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]

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.

[nevelica]

YES! Correct, THANKS for helping me on my review

[ryhom]

Thanks for the timely response, appreciate it