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1 | |
The problem posed by a natural monopoly is that it faces a ___________ . This means that ____________ |
|
| | A) | increasing average cost curve, marginal cost lies above average cost |
| | B) | increasing average cost curve, marginal cost lies below average cost |
| | C) | decreasing average cost curve, marginal cost lies above average cost |
| | D) | decreasing average cost curve, marginal cost lies below average cost |
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2 | |
State-run firms should price at _____________ and invest until price just covers ___________ |
|
| | A) | marginal social benefit, marginal cost |
| | B) | average social cost, long run marginal social cost |
| | C) | marginal social cost, long run marginal social cost |
| | D) | below marginal cost, long run marginal cost |
|
3 | |
Investment decisions in state owned firms should use ______________of costs and benefits and the ____________discount rate |
|
| | A) | private valuation, private |
| | B) | social valuation, social |
| | C) | private valuation, social |
| | D) | social valuation, private |
|
4 | |
In the long run, public companies should set price equal to |
|
| | A) | the long run marginal cost |
| | B) | the opportunity cost |
| | C) | the total cost |
| | D) | the average cost |
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5 | |
The practice of some phone companies to price calls by time of day is an example of |
|
| | A) | average cost pricing |
| | B) | cost plus pricing |
| | C) | price skimming |
| | D) | peak load pricing |
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6 | |
The expected benefits of privatisation are |
|
| | A) | avoidance of government intervention |
| | B) | greater commercial self-reliance |
| | C) | productivity improvements resulting from competitive pressures |
| | D) | all of the above |
|
7 | |
The acquisition of private companies by the public sector is known as |
|
| | A) | Regulation |
| | B) | Nationalisation |
| | C) | Privatisation |
| | D) | De-regulation |
|
8 | |
Privatisation is the ________ of ____________ the private sector |
|
| | A) | purchase, shares by |
| | B) | sale, public-sector firms to |
| | C) | sale, shares by |
| | D) | purchase, public-sector goods by |
|
9 | |
The main task of the Regulator of a private sector utility is to |
|
| | A) | implement government policy |
| | B) | speak on behalf of the company |
| | C) | ensure it behaves in the public interest |
| | D) | undertake important work for the company |
|
10 | |
When a regulator becomes champion of the industry that it is supposed to regulate it is known as regulatory capitulation |
|
| | A) | TRUE |
| | B) | FALSE |
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11 | |
The privatisation of public assets at a price reflecting their true value, increases government wealth |
|
| | A) | TRUE |
| | B) | FALSE |
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12 | |
Privatisation in the UK shows that privatised utilities can be left to trade like any other company. |
|
| | A) | TRUE |
| | B) | FALSE |
2002 A McGraw-Hill Online Learning Centre