Wally owns a dog whose barking annoys Wally's neighbor, Corrine. Suppose that the benefit of owning the dog is worth $700 to Wally and that Corrine bears a cost of $500 from the barking. Assuming Wally has the legal right to keep the dog, a possible private solution to this problem is that
a. Wally pays Corrine $600 for her inconvenience.
b. Corrine pays Wally $400 to give the dog to his parents who live on an isolated farm.
c. Corrine pays Wally $550 to give the dog to his parents who live on an isolated farm.
d. The current situation is efficient.
d
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People consume more soup as temperatures falls. So, as cold weather approaches,
A) the demand for soup increases. B) people move farther beyond their demand curves. C) the quantity of soup demanded increases. D) people move closer to their demand curve for sou
The above figure shows a housing market with a rent ceiling equal to $1,000. In this figure, what area is equal to the resources lost due to search?
A) area A B) area B C) area C D) area D E) area E
The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. An increase in the wage rate for labor leads to
A) an increase in the quantity of labor demanded. B) a decrease in the quantity of labor demanded. C) an increase in the demand for labor. D) a decrease in the demand for labor.
Can a monopolistically competitive firm producing a good with lots of very close substitutes earn large positive profits in the long run?
What will be an ideal response?