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Question 10 2 pts Refer to the following figure when answering the following questions, Figure 18

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Question 10 2 pts Refer to the following figure when answering the following questions, Figure 18.2: Government Outlays and Receipts as a Percentage of GDP, 1947-2012 Outlay-GOP Ratio - Recept GDP Ratio 30% 25% 20% ??? RS 15% 10% 1947 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 YEAR Consider Figure 18.2. During which of the following periods did the federal government run a budget surplus? O 1998-2002 All of these answers are correct. O 1955-1958 O None of these answers is correct. O 1947-1949 Question 11 2 pts The government debt is: the annual difference between government spending and tax revenues. equal to total tax receipts. the total accumulation of deficits in the current period. the outstanding stock of bonds that have been issued in the past. None of these answers is correct. Question 12 2 pts The difference between the primary and total deficits is that the primary deficit: O equals zero O includes spending on interest. O excludes spending on interest. is always balanced is never balanced

9. Regulating a natural monopoly Consider the local telephone company, a natural monopoly. The following graph shows the monthly demand curve for phone services and the company's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves. ? 100 90 80 70 60 PRICE (Dollars per subscription) 50 30 20 ??? MC 10 MR D 0 0 2 4 20 6 8 10 12 14 18 18 QUANTITY (Thousands of subscriptions) Suppose that the government has decided not to regulate this industry, and the firm is free to maximize profits, without constraints. Negative 7,000 10 Positive 13,000 Complete the first row of the following table. 15 Zero Short Run 3 14,000 1 20 Price (Dollars per subscription) Profit Long-Run Decision 45 Pricing Mechanism Profit Maximization Quantity (Subscriptions) 1 1 2 2 Marginal-Cost Pricing Average-Cost Pricing 3 2 1 Suppose that the government forces the monopolist to set the price equal to marginal cost. Exit the industry Stay in business Complete the second row of the previous table. Stay or exit Suppose that the government forces the monopolist to set the price equal to average total cost. Complete the third row of the previous table. True or False: Under the average-cost pricing policy, the telephone company has no incentive to cut costs. O True O False