1.The dilemma of natural monopoly occurs when:

(a)average costs rise as output expands.

(b)a group of smaller producers has the potential to produce total industry output more efficiently than a single large firm.

(c)demand equals supply at a point where the industry long-run average cost curve is still declining.

(d)the profit-maximizing output level occurs at a point where the industry long-run average cost curve is still declining.

2.In the risk-adjusted discount rate approach, increasing risk aversion is reflected in a cost of capital that exceeds the:

(a)risk-free rate.

(b)risk free rate and falls with increasing risk.

(c)risk free rate and falls with decreasing risk.

(d)none of these.

3.The so-called Prisoner's Dilemma:

(e)is a one-shot game with ongoing interaction between competitors.

(f)is a repeated game.

(g)has no dominant strategy.

(h)exists because both would be better off if they could be assured that the other would confess.