Economics MCQs

Page No. 161

Sales staff are keen to sell extended warranties because ?


a extended warranties offer value for money.


bthe cost of repair will usually exceed the cost of the warranty


c they are paid commission on each extended warranty they sell.


dThey are concerned about customer satisfaction.



A conglomerate merger is a merger of ?


a firms producing the same product


b firms at various stages in production process.


cfirm producing complementary products


dfirms producing unrelated products.



Antimonopoly laws are based on the proposition that ?


a increasing market power is the best way to achieve efficiency.


bcompetition is the best way to achieve efficiency.


cpublic ownership is the best way to achieve efficiency


dregulation is the best way to achieve efficiency.



The external benefits of using cars are ____ and the external costs are _____?


alow; low


b high; high


c low; high


dhigh; low


View Answer low; high

Between 1990 and 1999 car ownership per thousand of the population fell in ?


aSpain


bBelgium


cUSA


dUK


View Answer USA

Economists use the term regulatory capture to mean a situation where the private sector firms being regulated ?


aPersuade the regulator to operate in the industry’s interests


b Persuade the regulator to act in the firms interests.


c Bribe the regulator.


dPersuade the government to change the regulatory regime.



In the country X it is now becoming possible to buy electricity from a gas company and gas from an electricity company. This is called ?


a deregulation


bmaking markets contestable


cnatural monopoly.


dcross-subsidization.



De-regulation is where the government ?


aremoves barriers to entry


bimposes higher standards of conduct


c removes barriers to entry and minimum product quality standards


dbreaks up private sector monopolies.



Privatization is the transfer of ?


acorporately owned businesses to individuals


bpublicly held stock to private individuals.


c government businesses to the private sector


dprivately owned businesses to the government sector



A firm charging different buyers’ different prices for the same product is practicing ?


aCompetitive pricing.


b Price discrimination


cprice discounting.


dprice fixing.



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