An example of a sunk cost would be:
A. the price of a lift ticket you bought and used to ski the whole day.
B. the nonrefundable deposit you put on your vacation rental.
C. the price of a lift ticket you bought and used for 1 run before you fell and broke your ankle.
D. All of these are examples of sunk costs.
Answer: D
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Education leads to external benefits because
A) the people who become better educated get better jobs. B) better educated people commit fewer crimes. C) better educated people are less lazy. D) little pollution is created when educating people. E) better educated people are more productive.
A dominant strategy
A) is one that a firm is forced into following by government policy. B) involves colluding with rivals to maximize joint profits. C) involves deciding what to do after all rivals have chosen their own strategies. D) is one that is the best for a firm, no matter what strategies other firms use.
Regulating an industry to remove all economic profit
A. removes all incentive for efficiency and responsiveness to consumer demand. B. removes distortions caused by cross subsidies. C. removes allocative inefficiency. D. increases incentives to be productively efficient.
A sidewalk runs across Jermichael's front yard near the street. By law, anyone has the right to use the sidewalk. When Jermichael shovels the sidewalk after a heavy snowstorm,
a. he is providing a good that is excludable. b. he is a free rider. c. those who walk on the sidewalk are using a club good. d. he is providing a good that is not rival and not excludable.