Assume that the supply curve is horizontal because marginal cost is constant at $10. John, Robert, and Jimmy each value one compact disc at $20 but only Jimmy and John value a second compact disc (Jimmy at $5 and John at $15). The maximum possible value achieved in this market is
a. $35.
b. $60.
c. $75.
d. $80.
a. $35.
You might also like to view...
Suppose that for a curve, as the variable measured on the x-axis increases, the variable measured on the y-axis decreases. The curve has a ________ slope
A) tangent B) positive C) negative D) hypothetical
Which of the following is not part of an argument that unions lead to increased productivity?
a. reduction in worker turnover b. improved morale c. employees with more motivation d. benefits from featherbedding
According to crude versions of the quantity theory of money
A. the income velocity of money is highly variable in the short run. B. a full employment rate of output is not characteristic of market equilibrium. C. a 10-percent increase in the money supply will result in a 10-percent increase in the price level. D. a 25-percent decrease in the money supply will result in a 25-percent decrease in velocity.
Consider the game tree in Figure 12.8. If Store B's payoff in the second rectangle from the top were $250 instead of $100, the outcome of the game will be that:
A. both stores choose to advertise. B. both stores choose not to advertise. C. Store A chooses to advertise but Store B chooses not to advertise. D. Store B chooses to advertise but Store A chooses not to advertise.