If the typical firm’s minimum average variable cost is $10 at an output of 50 units, if marginal cost is $20 at 70 units, and there are 1,000 firms in the industry, sketch supply curves for the typical firm and for the industry as a whole.
What will be an ideal response?
Figure 10-13
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Abe owns a dog; the dog's barking annoys Abe's neighbor, Jenny. Suppose that the benefit of owning the dog is worth $200 to Abe and that Jenny bears a cost of $400 from the barking. Assuming Abe has the legal right to keep the dog, a possible private solution to this problem is that
a. Jenny pays Abe $150 to give the dog to his parents who live on an isolated farm. b. Abe pays Jenny $350 for her inconvenience. c. Jenny pays Abe $300 to give the dog to his parents who live on an isolated farm. d. There is no private transaction that would improve this situation.
How much is the percentage of income received by the highest quintile on line R?
Advertising a brand can help create a reputation effect.
Answer the following statement true (T) or false (F)
Which of the following is an accurate statement about the effect of close substitutes?
a. Goods with many close substitutes will usually have elastic demands. b. Goods with many close substitutes will usually have inelastic demands. c. Goods with few close substitutes will usually have perfectly elastic demands. d. Goods with few close substitutes will usually have perfectly inelastic demands.