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NEW QUESTION: 1
If the government regulates a natural monopoly through a policy of average-cost pricing, we would expect that, compared to an unregulated natural monopoly,
A. prices would be higher and output would be lower.
B. prices would be lower and output would be higher.
C. prices would be lower and output would be lower.
Answer: B
Explanation:
Governments regulate natural monopolies in order to reduce prices and increase output.
Average-cost pricing, however, always provides the firm with no incentives to control costs, so average costs increase.
NEW QUESTION: 2
Which of the following statements regarding the required distribution of income by a regulated investment
company are true?
A. Under current tax laws, qualifying dividends distributed to the company's investors are taxable to those
investors at a preferential rate-i.e., either 0% or 15%, depending on the investor's marginal tax rate.
B. Both A and B are true statements.
C. If an investor in the investment company has elected to reinvest his dividend and capital income in the
company rather than receiving a check, then the investor is not required to pay taxes on the reinvested
funds.
D. Both short-term and long-term capital gains earned by the company can be distributed only once a
year.
Answer: A
Explanation:
The statement regarding the required distribution of income by a regulated investment
company that is true is that under current tax laws, qualifying dividends distributed to the company's
investors are taxable to those investors at a preferential rate-i.e., either 0% or 15%, depending on the
investor's marginal tax rate. This preferential treatment is due to expire on Dec. 31, 2010 unless it is
extended. Only long-term capital gains earned by the company can only be distributed once a year.
Short-term capital gains are generally distributed along with dividends-usually once a quarter. Even if an
investor elects to reinvest dividend and capital gain income rather than receiving a check, the investor
must still pay taxes on the income he would have received had he not made the election.
NEW QUESTION: 3
What is true about line-switching?
A. Line-switching is completed at the low-speed facility level.
B. Fibers transmit simultaneously in both directions.
C. Line-switching uses no more than two fiber strands.
D. No single failure will prevent continuing communications on the network.
Answer: D