Before the policy was put into effect, estimated consumer surplus (in thousands of dollars) was valued at
A collaborative federal and state program has been proposed in response to acid rain damagein Newport Bay, Maryland. To estimate the incremental benefits of the program, you use thetravel cost methodbasedupon the following pre- and post-policy recreational demand functions:
Pre-policy: P = 62 – 0.02V1 Post-policy: P = 80 – 0.02V2,
where V is the number of visitors (in thousands) and P is the admission fee. Assume the admission fee is set at $20 per visitor.
a. 2,100 b. 44,100 c. 90,000 d. 45,900
b. 44,100
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According to the Department of Justice merger guidelines, a proposed merger between two firms may be challenged if the post-merger Herfindahl-Hirschman Index
A) lies between 1,000 and 1,800 and the merger raises the Index by more than 100 points. B) lies above 1,800 and the merger raises the Index by less than 50 points. C) lies between 1,000 and 1,800 and the merger raises the Index by 50 points. D) lies below 1,000 and the merger raises the Index by 100 points.
The Jones family sells peaches at market price. Which of the following explains why they do this?
a. many buyers and many sellers in their market b. few buyers and few sellers in their market c. few buyers and many sellers in their market d. many buyers and few sellers in their market
The following question relate to a community that is circular in nature with a one mile circumference. There are 81 people evenly distributed around the lake where the town is built. The travel cost is $10 per mile, a restaurant costs $100 to set up, and the cost per meal is $2. Sketch two total cost curves as functions of the number of restaurants. The first one is the total cost of meals per day and the second is the total cost of transportation per day. Plot five points for each curve. Round off small residuals to the nearest whole number.
What will be an ideal response?
Two members of the Kenyan parliament from coffee-growing areas said that no firm should have a monopoly to market Kenyan coffee. The retail coffee company Tetu Coffee has sparked a storm in the industry by promising to earn the country Sh400 billion annually if given exclusive licenses to market Kenyan coffee. The members of parliament said the coffee bean farmers should be free to sell their beans to the highest bidder. Are the farmers in Kenya justified in being upset with having a single coffee buyer?
A. Maybe; the single buyer may reduce price but also will raise the quantity of coffee beans. B. Yes; the single buyer will reduce both the quantity and price of coffee beans. C. No; the single buyer will increase the price and quantity of coffee beans. D. Maybe; the single buyer may reduce quantity but also raise price of coffee beans.