Quiz6 - Nov 30 - WITH ANSWERS - Quiz#6Nov30,2007...

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Quiz #6 – Nov 30, 2007 Olivier Giovannoni 304K – introduction to  microeconomics
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Question 1 ________ is an alternative to regulation as a means of regulating  markets.  A)  Negative publicity  B)  The imposition of price controls  C)  The threat of incarceration  D)  Antitrust law (86%) Question 2 In this figure, if the natural monopoly  Shown completely captures the regulator,  then the price will be  A)  $6 (80%)   B)  $4.  C)  $5.  D)  $2. 
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Question 3 In the above figure, if this natural  monopoly is not regulated the  deadweight loss to society is A)  Gac (74%) B)  gde C)  ebc D)  ecf . Question 4 A cartel is an arrangement  A)  to flood the market and eliminate competition.  B)  by the government to restrict imports.  C)  among firms to decrease output and raise price (97%)  D)  to steal industrial processes from rival firms.  This graph relates to the “rate of return regulation” which is the situation where the natural monopoly is able to report inflated costs to the authorities. Because of that profit is maximized at point G and not E (or C) See question 9 (how come you got that one right?)
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Question 5 Although the effects of antitrust law have varied over the years, the  overall thrust appears to have been to  A)  increase producer surplus, as suggested by the capture theory.  B)  reduce deadweight loss, as suggested by the social interest theory  (86%).  C)  reduce deadweight loss, as suggested by the capture theory.  D)  increase producer surplus, as suggested by the social interest  theory.  Question 6 If a marginal cost pricing rule is imposed on the natural monopoly shown in this figure, then it will produce  A)  3 million units.  B)  5 million units. 
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This note was uploaded on 02/16/2010 for the course ECONOMICS 420K taught by Professor Dusansky during the Spring '10 term at University of Texas at Austin.

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Quiz6 - Nov 30 - WITH ANSWERS - Quiz#6Nov30,2007...

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