Tony notes that an electronics store is offering a flat $20 off all prices in the store. Tony reasons that if he wants to buy something with a price of $50, then it is a good offer, but if he wants to buy something with a price of $500, then it is not a good offer. This is an example of:
A. the proper application of the Cost-Benefit Principle.
B. inconsistent reasoning; saving $20 is saving $20.
C. inconsistent reasoning because prices are sunk costs.
D. rational choice because saving 40% is better than saving 4%.
Answer: B
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What is the rationale behind a cap-and-trade emission allowance system?
A) It creates a market for externalities. B) It disciplines polluting firms by specifying the maximum amount of emissions allowed and gives them permits to pollute up to their allowance. C) It provides firms with the incentive to consider less costly alternatives to pollution reduction by making firms pay for the right to pollute beyond their specified allowance. D) It raises revenue for the government through the sale of permits.
The Middle Colonies' exports went primarily to
a. the United Kingdom. b. continental Europe. c. the West Indies. d. Africa.
Suppose Erie Textiles can dispose of its waste "for free" by dumping it into a nearby river. While the firm benefits from dumping waste into the river, the waste reduces fish and bird reproduction. This causes damage to local fishermen and bird watchers. At a cost, Erie Textiles can filter out the toxins, in which case local fishermen and bird watchers will not suffer any damage. The relevant gains and losses (in thousands of dollars) for the three parties are listed below. WithFilterWithoutFilterGains to Erie$200$400Fisherman$180$50Bird Watchers$130$25When Erie Textiles operates with a filter, the total gain (in thousands of dollars) by all three parties is ________.
A. $600 B. $475 C. $510 D. $985
Your teacher decides to play a game where every student must contribute a dollar. All money collected is distributed at the end of the game among the students. This is an example of a
A) positive-sum game. B) zero-sum game. C) strategy. D) negative-sum game.