There are 10 families in a neighborhood that are affected by noise pollution from a local factory. The noise could be reduced if the company spent $5,000 on technological improvements. The company agrees to make these improvements if the affected families contribute the $5,000. Since there are no legal restrictions governing the factory's noise, the negotiations fail. This outcome is an example of the
A. Coase theorem.
B. drop-in-the-bucket problem.
C. free-rider problem.
D. problem that arises when property rights are not defined.
Answer: D
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Assume that, for a particular demand curve, when price rises from $50 to $60, total revenue falls from $8,750 to $7800
a. Based on this information, what is the quantity demanded at each price. b. Without calculating the coefficient of elasticity, is demand over this range elastic or inelastic? How do you know?
Which of the following is not held constant as you move along the demand curve?
A. The price of that good B. The incomes of consumers C. The price of other goods D. The preferences of consumers for the good
You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table. ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50A risk-loving manager will prefer project:
A. A. B. B. C. C. D. D.
Refer to the above table. The marginal utility of the 7th movie for Michael is
A. 15 units of utility. B. 35 units of utility. C. 20 units of utility. D. 435 units of utility.