A one-day ticket to Sea World costs $37, but a two-day pass costs $42 . What is the average cost per day for a one-day pass? For a two-day pass? What is the marginal cost of a second day at Sea World? Why might Sea World charge such a price for a second day's entrance to the park?
The one-day pass average cost is $37 . The average cost per day of the two-day pass is $21 . The marginal cost of the second day is $5 . Sea World knows that due to diminishing marginal utility, the value of the first day's visit is high, but the second day is much lower. So in order to entice people to visit for a second day and increase Sea World revenues, the price reflects the decrease in value to individuals.
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Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Industrio ($/day) $350$400$500$700$1,000 Cost to Capitalista
($/day) $225$250$290$400 $600Suppose a permit system has been adopted and each firm has already purchased one permit. Industrio would be willing to pay up to ________ for the right to emit a second ton of smoke, and Capitalista would be willing to pay up to ________ for the right to emit a second ton of smoke. A. $200; $110 B. $200; $300 C. $100; $40 D. $500; $290
The U.S. trade deficit is most likely to be harmful in the future if:
A. U.S. citizens refuse to lend to foreigners as a result of it. B. U.S. citizens continue to accumulate foreign assets. C. U.S. production continues to exceed U.S. consumption. D. the inflow of financial capital associated with the current deficit does not finance productive investment.
By definition, inalienable rights:
A. would never be violated in a free market environment. B. do not exist. C. cannot be sold or given away. D. belong to individuals, and so they can sell them or give them away.
The principle that "More is better" results in indifference curves
A) sloping down. B) not intersecting. C) reflecting greater preferences the further they are from the origin. D) All of the above.