The marginal cost of educating a student is $30,000, and this cost is independent of the number of students. The figure above shows the marginal private benefit that a student receives from education
If schools are competitive, how many students are enrolled? A) zero
B) 20,000
C) 50,000
D) It depends on the demand.
B
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Hotelling's model has been used to describe differentiation in the political "market." Suppose that 100 voters are evenly distributed between the extreme left and the extreme right on the political spectrum, and that all voters vote, and they always vote for the candidate closest to them on this spectrum. The numbers on this spectrum represent the number of voters lying to the left of the number. So, at the midpoint, fifty voters lie to the left and fifty to the right. At the extreme right end, all 100 voters lie to the left. 
Suppose Candidate X is running against Candidate Y. If Candidate Z enters the race:
A. all of the voters who were going to vote for Y will now vote for Z. B. most of the voters who were going to vote for Y will now vote for Z. C. approximately half of the voters who were going to vote for X will now vote for Z. D. X will win because Y and Z will be competing for the same voters.
Which of the following best represents search costs?
A) Dinesh has to spend time and effort to make sure that the chemical factory is living up to the agreed upon bargain that it will reduce the pollution it is releasing into the local river by 50 percent. B) Laila needs to come up with enough cash to pay the owners of the paper manufacturing plant, its attorneys, accountants, and negotiators so that a bargain can be reached with the paper manufacturer to reduce air pollution. C) Esperanza has to spend time and effort locating and organizing all the other people who have been adversely affected by the strong odors emanating from the local slaughterhouse in order to initiate the bargaining process. D) Rafael has to spend time determining whether the fertilizer manufacturer, the lead smelter, or the oil refinery is the cause of pollution seeping into the groundwater in his local community.
Which of the following is ALWAYS true regarding a profit maximizing monopolistically competitive firm in short-run equilibrium?
A) P = ATC. B) P = MR. C) MR = MC. D) MC = ATC.
________ in the domestic interest rate causes the demand for domestic assets to shift to the ________ and the domestic currency to appreciate, everything else held constant
A) An increase; right B) An increase; left C) A decrease; right D) A decrease; left