Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. ResidentReservation PriceIncomeKris$100$1,000Taylor$200$5,000Max$700$6,000 If the government proposes to pay for the public good with a proportional income tax of 8 percent, then:
A. Kris and Max will vote in favor of the tax, but Taylor will vote against it.
B. all three voters will vote against the tax.
C. Max and Taylor will vote against the tax, but Kris will vote in favor of it.
D. all three voters will vote in favor of the tax.
Answer: A
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In the cable TV service industry, end users are
A) advertisers only. B) cable TV subscribers only. C) both advertisers and cable TV subscribers. D) no one.
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 $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed in the table. CustomerReservation Price($/Rental)A22B16C12D8E6F4Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island bikes can charge a different price in the morning and in the afternoon, then in the afternoon, it will rent out ________ bike(s) and charge ________ per bike.
A. 3; $4 B. 5; $10 C. 1; $8 D. 2; $6
If a certain automotive part can be purchased in Mexico for 60 pesos or in the United States for $6.25 and if the nominal exchange rate is 8 pesos per U.S. dollar, then the automotive part:
A. is more expensive in the United States. B. is less expensive in Mexico. C. is less expensive in the United States. D. costs the same in Mexico and the United States.
Refer to the figures. Which figure(s) represent(s) a situation where firms are likely to hold inventories to accommodate unexpected changes in demand?
A. A only.
B. B only.
C. Both A and B.
D. Neither A nor B.