An information product typically has
A) high total fixed costs and high marginal costs.
B) low total fixed costs and low marginal costs.
C) low total fixed costs and high marginal costs.
D) high total fixed costs and low marginal costs.
Answer: D
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Refer to Figure 5-16. Suppose Amit and Bree know each other's preferences so that it is not possible for one to deceive the other
Which of the following statements best describes the circumstances under which the optimal quantity of street lights could be achieved? A) The optimal quantity will be installed only if Bree pays for the entire installation cost. B) The optimal quantity will be installed only if the two parties agree to pay according to their willingness to pay as indicated by their respective demand curves. C) Because there are only two consumers, it is likely that private bargaining will result in the optimal quantity being installed. D) The optimal quantity will be installed only if the two parties split the cost of installation equally.
Joe has broken the mirror of my car. I have legal recourse to sue for damages because of
A) social costs. B) transactions costs. C) common property rights. D) private property rights.
According to the figure shown, Starbucks:
This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts. Both companies are trying to decide whether or not to expand in an area. The area can handle only one of them expanding, and whoever expands will cause the other to lose some business. If they both expand, the market will be saturated, and neither company will do well. The payoffs are the additional profits (or losses) they will earn.
A. has a dominant strategy to expand.
B. has a dominant strategy not to expand.
C. has first-mover advantage.
D. should wait to see what Dunkin Donuts is going to do.
Refer to Scenario 3.3 below to answer the question(s) that follow.SCENARIO 3.3: -Mustard and mayonnaise are substitutes. -Mustard and relish are complements. -Mustard is a normal good. -During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves.Refer to Scenario 3.3. As a result of the recall, you would expect that
A. the price of mustard would increase and both the quantity of mustard supplied and the quantity of mustard demanded would increase. B. the price of mustard would increase, the supply of mustard would increase, and the quantity demanded of mustard would decrease. C. the supply of mustard would decrease, the price of mustard would increase, and the demand for mustard would decrease. D. the supply of mustard would decrease, the price of mustard would increase, and the quantity demanded of mustard would decrease.