Sandy derives utility from consuming "all other goods," g, and clean air (measured by particulate matter removed per m3), a, as measured by the utility function U(g,a) = g0.6a0.4. The price of "all other goods" is $20 and the price of clean air (abatement) equals $10. Brian is the only other consumer in the market for clean air and demands 10 units of clean air. What is the market demand for
clean air?
A) Total market demand is 14 units of clean air.
B) Total market demand is 12 units of clean air.
C) Total market demand is 10 units of clean air.
D) Total market demand is 16 units of clean air.
A
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All else equal, the price elasticity of demand for a good tends to be lower:
A. in the long run. B. if the good has many close substitutes. C. if the good represents a large share of a consumer's budget. D. if the good has few close substitutes.
Refer to the scenario above. If the marginal cost of producing the last unit of the good is $40, Nash equilibrium will occur when both firms charge a price of ________
A) $20 B) $40 C) $60 D) $70
Use the above figure. If this monopolist was not regulated, the profit-maximizing quantity and price would be
A) Q2 and P1. B) Q2 and P3. C) Q3 and P2. D) Q4 and P1.
The goal of the Head Start program is to
a. offer comprehensive job training and skills enhancement programs for displaced workers b. give hungry families a chance to receive free government surplus foods c. enable farmers who are just starting a business the opportunity for low-interest loans to purchase equipment d. provide educational and social services to households with preschool children e. improve technological development so that U.S. companies can better compete internationally and hire more U.S. workers