Ch16 - Ch16 Student 1 Natural monopoly arises when A there...

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Ch16 Student: ___________________________________________________________________________ 1. Natural monopoly arises when A. there is only one firm in the area. B. there are high barriers to entry. C. costs are subadditive. D. it is more cost efficient to have multiple firms. E. none of the above 2. An over allocation of resources in an industry means that for the last unit produced, 3. An under allocation of resources in an industry means that for the last unit produced, 4. When social surplus is maximized in competitive equilibrium 5. When we say that market prices allocate goods to the highest-valued users, we mean that A. only consumers with higher incomes will get any of the good, while lower income consumers get none of the good. B. only consumers who value the good more than the market price of the good will choose to buy the good. C . government allocation of the good is warranted because government can make sure that the good gets consumed by deserving individuals. D. there is no shortage.
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6. The less information consumers have about product quality, 7. Private provision of public goods fails to achieve economic efficiency because A. the free rider problem causes overproduction of the good. B. the free rider problem prevents collection of sufficient revenue. C. the price of the privately supplied public good must exceed zero in order to be allocatively efficient. D. both a and c E. both b and c
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