Owen and Simon both like playing with balls and cars. Suppose B represents the number of balls, and C represents the number of cars. If Owen's utility function can be given by U(B, C) = 10B + 5C, and Simon's utility function can be given by U(B, C) = 6B + 6C, which of the following trades would be mutually beneficial?
A. Owen gives Simon 3 cars in exchange for 2 balls
B. Owen gives Simon 2 cars in exchange for 3 balls
C. Owen gives Simon 3 balls in exchange for 2 cars
D. Owen gives Simon 2 balls in exchange for 3 cars
A. Owen gives Simon 3 cars in exchange for 2 balls
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Analysts cite figures on the number of uninsured in the U.S. as low as 10 million and as high as 60 million. Which of the following is a true statement?
a. The uninsured are all free riders. b. Most of the uninsured have health problems and are not able to get private health insurance. c. Most of the uninsured have some labor-force connection—either working or a dependent of someone who is working. d. The lack of health insurance means that the individual has virtually no access to medical care. e. Once you lose your health insurance it is extremely difficult to get reinsured.
Figure 12.8 depicts an advertising game between two stores. "Advertising" is:
A. a dominant strategy for Store A but not for Store B. B. a dominant strategy for Store B but not for Store A. C. a dominant strategy for both stores. D. a dominant strategy for neither store.
The production possibilities curve for two products is bowed out because
A) as the production of a good increases, opportunity cost increases. B) as the production of a good increases, opportunity cost is unchanged. C) the qualities of the resources are not identical. D) there are unemployed resources.
Once a product becomes established, network externalities may create ________ costs that make consumers reluctant to buy a new product with better technology
A) external B) implicit C) switching D) marginal