1)

Give an example of a government-created monopoly.

Is creating this monopoly necessarily bad public policy?

Define natural monopoly.

What does the size of a market have to do with whether an industry is a natural monopoly?

Why is a monopolist's marginal revenue less than the price of its good?

Can marginal revenue ever be negative? Explain.

2)

Manufacturers of laundry detergent and dishwashing soap reinvest a relatively large percentage of their sales revenues on advertising campaigns.

Most of these advertisements that appear on television stress the fact that their product is "New and Improved" Why?

Please give an explanation and include a discussion of the type of market (perfect competition, monopoly, monopolistic competition, oligopoly) this might be.

3)

Describe the mechanism that leads from a change in expansionary monetary policy to changes in interest rates, the exchange rate, and the trade balance.