P-TV and QRS-TV are trying to decide whether to air a sitcom or a reality show in a given time slot. Viewers like both sitcoms and reality shows, but sitcoms are more expensive to produce than reality shows since real actors need to be hired. QRS-TV makes its decision first, and then P-TV observes that choice before making its decision. Both stations know all of the information in the decision tree below. 
Suppose QRS-TV enters into an agreement with P-TV that gives QRS-TV the exclusive right to air a reality show during this time slot. QRS-TV would have to pay P-TV ________ in order to persuade P-TV to enter into this agreement.
A. nothing
B. at least $5 million
C. more than zero, but less than $5 million
D. at least $10 million
Answer: B
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If the costs of producing pizza increase, which will occur?
A) The supply of pizza will decrease. B) The demand curve for pizza will shift leftward when the price of a pizza increases. C) Pizza will cease to be produced and sold. D) The quantity of pizzas supplied will increase as sellers try to cover their costs. E) The demand curve for pizza will shift rightward when the price of a pizza increases.
Which of the following equations is used to determine per unit profit?
a. P* ÷ ATC b. P* x ATC c. P* + ATC d. P* ? ATC
Marginal costs are defined as
A) the change in total costs due to a one-unit change in production. B) costs that are viewed as marginal; of little or small importance. C) costs that represent a change, but one that cannot be measured correctly. D) the change in the decisions that are made by households and firms.
Which of the following would not address the moral hazard problem?
A. Allow the government to take over the policy-making decisions of the Federal Reserve B. Separate banks from other financial institutions C. Design systems so that necessary financial transactions stayed within regulated banks D. Establish strict regulations of the banks