An example of a standardized product is
A. toothpaste.
B. a restaurant meal.
C. paper towels.
D. an egg.
D. an egg.
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The opportunity cost of one more slice of pizza in terms of sodas is the
A) total number of sodas that we have divided by the total number of pizza slices that we have. B) price of a pizza slice minus the price of a soda. C) number of pizza slices we have to give up in order to get one extra soda. D) total number of pizza slices that we have divided by the total number of sodas that we have. E) number of sodas we have to give up in order to get one extra pizza slice.
An example of an externality occurs when a chemical factory
A) is producing ethanol and dumps waste in a river upstream from a popular fishing spot. B) produces fertilizers that do not help plants grow. C) produces fertilizers that kill plants rather than feed them. D) overworks its employees.
Andrew has the utility of wealth curve shown in the above figure. He owns an SUV worth $30,000 and that is his only wealth. There is a 10 percent chance that he will have an accident within a year. If he does have an accident, his SUV is worthless
Suppose all SUV owners are like Andrew. An insurance company agrees to pay each person who has an accident the full value of his/her SUV. The company's operating expenses are $1,500. What is the minimum insurance premium that the company is willing to accept? A) $1,500 per year B) $4,500 per year C) $3,000 per year D) $6,000 per year
Suppose a new law requires all piercing studios to pass tougher licensing tests and to begin using more costly sterilization methods. Other things constant, this law would cause
a. an increase in the supply of piercings and a lower price for piercings. b. an increase in the supply of piercings and a higher price for piercings. c. a decrease in the supply of piercings and a higher price for piercings. d. a decrease in the supply of piercings and a lower price for piercings.