Refer to the information provided in Scenario 22.5 below to answer the question(s) that follow.SCENARIO 22.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.?Average
Monthly Telephone Use per Resident (minutes)Island20162017Achoo4,5005,150Zoink4,8005,225Refer to Scenario 22.5. The total cost of telephone service for residents of Achoo in 2017 is ________ Bugabucks.
A. 5,150
B. 25,750
C. 103,000
D. 128,750
Answer: D
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When existing firms leave a perfectly competitive industry, ________
A) the equilibrium price decreases, while the equilibrium quantity increases B) the equilibrium price increases, while the equilibrium quantity decreases C) both the equilibrium price and quantity increase D) both the equilibrium price and quantity decrease
If the absolute value of the price elasticity of demand for cell phone service is 3, then if the price of cell phone service increases by 1 percent, quantity demanded would:
A. increase by 3 percent. B. decrease by 0.33 percent. C. increase by 0.33 percent. D. decrease by 3 percent.
The reason individual homeowners usually do not hire a private contractor to fill the potholes on their street is because:
A. it costs too much. B. the value to the neighborhood exceeds the cost of repair. C. others who use the street will be free riders. D. there are negative externalities associated with the repair.
Utility is maximized when the chosen bundle of goods satisfies the equimarginal rule and when the chosen bundle is on the budget line.
Answer the following statement true (T) or false (F)