Exhibit 17.1 $0.15 Marginal social cost Dollars per kilowatt-hour 0.10 - Marginal private cost 75 Millions of kilowatt- hours of electricity per month Refer to Exhibit 17.1, which shows a market for electricity. If technology is fixed, the discrepancy between the market output and the efficient level of output is eliminated by O a. subsidizing production by $0.05 per kilowatt hour. O b. subsidizing production of the good by $0.10 kilowatt hours. O c. imposing a tax of $0.05 per kilowatt hour on the utility. O d. letting the utility operate freely. O e. using a quota system to restrict production to 75 million kilowatt hours. QUESTION 10 1 points Save Answer Exhibit 17.3 Prices ($) Quantity Refer to Exhibit 17.3, which shows equilibrium in a market in the presence of externality in an economy. The total social gain from producing the socially efficient output rather than the private equilibrium output is shown by the area O a. abdf O b. bed. O c. bod. O d. bode. O e. acdfQUESTION 11 1 points Save Answer Which of the following acts of Congress declared restraint of trade illegal and declared any attempt at monopolizing unlawful? O a. the Sherman Antitrust Act O b. the Clayton-Celler Act O c. the Clayton Act O d. the Celler-Kefauver Anti-Merger Act O e. the Wheeler-Lea Act QUESTION 12 1 points Save Answer Suppose the market for taxis in Mexico City is a natural monopoly. Which of the following is likely to result from the regulation of taxis in Mexico City? O a. The price of taxi rides will decrease. O b. The supply of taxis will increase. O c. Taxi owners will have greater monopoly power. O d. The price of taxi rides will increase O e. The income of taxi owners will increase. QUESTION 13 1 points Save Answer How did U.S. producers react to competition from foreign imports between 1958 and 1988? O a. U.S. producers increased exports. O b. U.S. producers lobbied for more government intervention. O c. U.S. producers exited the industry. O d. U.S. producers raised prices.c O e. U.S. producers sought protection from foreign competitors through trade barriers.QUESTION 14 1 points Save Answer Exhibit 15.1 $4.00- Dollars per trip Demand 2.50 1.50 Long-run 1.25- average cost B 0.50- Long-run Marginal revenue marginal cost 100 200 210 Trips per month (millions) Refer to Exhibit 15.1, which shows the cost and revenue curves for a natural monopolist-the operator of a subway system. If regulators could set the price at $1.50 per trip, the subway would sell_ trips per month. O a. 200 million O b. 100 million O c. 250 million O d. 150 million O e. 210 millionQUESTION 15 1 points Save Answer Exhibit 15.1 $4.00- Demand Dollars per trip 2.50- 1.50 Long-run 1.25- g average cost B 0.50- Long-run Marginal revenue marginal cost 100 200 210 Trips per month (millions) Refer to Exhibit 15.1, which shows the cost and revenue curves for a natural monopolist-the operator of a subway system. At the efficient output rate, the efficient quantity is O a. 150 million. O b. 200 million. O c. 100 million. O d. 250 million. O e. 210 million. QUESTION 16 1 points Save Answer Social regulation O a. is government regulation aimed at preventing monopoly and fostering competition in markets where competition is desirable. O b. is the ability of a firm to raise the price without losing all its sales to rivals. O c. tries to improve health and safety, such as by control of unsafe working conditions and dangerous products. O d. is government regulation of natural monopoly, where, because of economies of scale average production cost is lowest when a single firm supplies the market. O e. is any firm facing an upward sloping demand curve. QUESTION 17 1 points Save Answer If producers support a proposed regulation in favor of their industry, then _ O a. it is possible that consumers will be adversely affected by the legislation. O b. it is likely that prices will fall. O c. it is likely that the regulation will eliminate deadweight loss. O d. it is likely that both producers and consumers will be adversely affected by the legislation. O e. it is likely that consumers will benefit from the regulation.QUESTION 18 Which of the following is a possible drawback of the growth of international trade in the United States? O a. It has led to an increase in the demand for domestic goods. O b. It has led to an increase in the number of goods available to consumers. O c. It has led to a decrease in the prices of products O d. It has made the local or even national market share less relevant. O e. It has led to a decrease in the prices of foreign goods. QUESTION 19 The Consumer Product Safety Commission is an example of O a. economic regulation O b. antitrust policy. O c. social regulation O d. market power. O e. economies of scale. QUESTION 20 The Sherman Act O a. prohibited fraudulent advertising. O b. created the Federal Trade Commission. O c. regulated the railroads. O d. exempted insurance companies from antitrust laws. O e. prohibited restraint of trade. QUESTION 21 Political candidates frequently try to get elected by appealing to O a. labor unions. O b. the median voter. O c. taxpayers. O d. other political candidates. O e. private markets. QUESTION 22 A limit on special-interest contributions to national political campaigns _ O a. would reduce the extent of rent seeking. O b. would involve widespread costs and concentrated benefits. O c. is an example of competing-interest legislation. O d. would give challengers an edge over incumbents. O e. is usually supported by special-interest groups as a way of saving money