Recall the Application about the merger of Sirius Satellite Radio and XM Satellite Radio to answer the following question(s).Recall the Application. Sirius and XM proposed the merger because they were:
A. losing money because their fixed costs were very high.
B. losing money because they faced the advertisers' dilemma.
C. earning duopolists' profits that were greater than zero, but knew they could earn more as a single firm.
D. losing money because their variable costs were higher than the price they could charge.
Answer: A
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A benevolent social planner would prefer that the output of good x be decreased from its current level if, at the current level of output of good x,
a. social value = private value = private cost < social cost. b. private cost < social cost = private value = social value. c. social cost = private cost = private value < social value. d. social cost = private cost = private value = social value.
While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, the marginal cost of purchasing the third taco would be
What will be an ideal response?
The government establishes the rules of the game for economic transactions in order to
A. Encourage spillover costs. B. Discourage the ownership of property. C. Legitimatize and enforce contracts. D. Discourage the production of capital.
A bank is insolvent when
A) its liabilities exceed its assets. B) its assets exceed its liabilities. C) its capital exceeds its liabilities. D) its assets increase in value.