Anna's Antiques expects to get two bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability. If Anna holds an auction between the two bidders, and both the bidders have low values, she would earn ___ from the auction
a. Just above $100
b. $100
c. Just above $70
d. $70
d
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Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 What is the socially optimal number of bikes for Island Bikes to rent out each day?
A. 4 B. 3 C. 5 D. 6
A tax rebate, which is expected to be offered in this and all future years, will
A) have a significant positive effect on consumption and aggregate demand, with aggregate demand growing by a multiple of the tax rebate. B) increase aggregate supply and aggregate demand. C) have a small positive effect on consumption and aggregate demand. D) have no effect on consumption and aggregate demand.
A business incurs the following costs per unit: Labor $5/unit; Materials $3/unit and rent $5000/month. If the firm produces 1000 units a month, the total costs equals
a. $5,000 b. $8,000 c. $13,000 d. $3,000
Cooperation:
B. is sustained by the promise of punishment for good behavior. C. can be established even if threats/promises are not credible. D. All of these are true about cooperation.