Question

1) A person can cause a negative externality by

a) becominh immunized

b) talking loudly in a restaurant

c) landscaping her lawn

d) paying taxes

2) A regulated natural monopoly that must set price equal to average cost will

a) suffer an economic loss

b) earn a net economic profit

c) earn a normal profit

d) earn so little that it will close in the long run

3) Most local phone companies

a) face a horizontal demnd curve

b) are regulated

c) are called public utilities

d) are natural monopolies

Question 7 A person can cause a negative externality by becoming immunized talking loudly in a restaurant landscaping her lawn paying taxes

Answer 1

a) "B"

Talking loudly in the restaurant can cause a negative externality in the market because it will affect the third people who are also there.

b) "C"

The natural monopolies in the market will be facing a normal profit at the point were the price and AR are eqaul.

c) "D"

Are natural monopolies because they need extensive wire network to operate.