This graph shows the marginal cost and marginal benefit associated with roadside litter clean up. Assume that the marginal benefit curve and marginal cost curve each have their usual slope. 
The socially optimal number of bags of litter removed from the roadside each day is:
A. 20.
B. 15.
C. 10.
D. 30.
Answer: B
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What is the payoff for each firm in this simultaneous game?
a. Both firms will earn 0 b. Firm A will earn 50 and firm B will earn -10 c. Firm A will earn -10 and firm B will earn 50 d. Both firms will earn 25
Suppose your university decides to increase parking fees in order to deal with the shortage of parking spaces. Nevertheless, the president of your student body convinces the university to pay back the amount spent on higher parking fees to students in the form of a rebate at the end of the school year. Therefore, the increase in parking fees will
A. not solve the parking shortage. B. will have no effect since it will be offset entirely by the rebate. C. make the parking shortage even worse. D. reduce demand for parking and hence alleviate the parking shortage.
Consider the demand curve above. If area 0ABC is smaller than area 0DEF, we may conclude that demand in this range is:
A. income-elastic. B. price-elastic. C. price-inelastic. D. income-inelastic.
What are the major features of monopolistic competition compared to pure competition and pure monopoly?
What will be an ideal response?