Briefly explain why economists think it is better for monopolies to be privately owned than publicly owned.
What will be an ideal response?
Many economists prefer private to public ownership of monopolies because of the incentive structure. Private owners want to minimize costs to increase their profits. If the private firm is doing a poor job on minimizing costs, there will be firings. When a government fails to minimize costs, it is often the customers and the taxpayers who foot the bill.
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Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice. 
Which of the following statements is true?
A. Jordan does not have a dominant strategy. B. For Jordan, seeing a comedy is a dominant strategy. C. Jordan's dominant strategy depends on Lee's choice. D. For Jordan, seeing a documentary is a dominant strategy.
An increase in the excise tax on alcohol
a. will have no effect on alcohol consumption. b. will generate minimal tax revenues for the federal government. c. coupled with a uniform drinking age nationwide would save lives. d. will generate substantial revenues is demand is elastic. e. all of the above.
What does job specialization do?
a. It allows workers to focus on the parts of the production process where they have an advantage. b. It allows workers to focus on all aspects of the production process. c. It allows organizations to maximize the tasks in which workers perform. d. It allows the production process to be performed by a single worker.
Suppose Country A collectively enjoys monopsony power in Good X. If Country A imposes a tariff on the imports of Good X, the world price of Good X will
A. remain unaffected. B. rise. C. become equal to the tariff-inclusive price in Country A. D. fall.