Author Question: Assume that you had a ticket for a basketball playoff game that you bought for 50, the maximum price ... (Read 57 times)

KimWrice

  • Hero Member
  • *****
  • Posts: 579
Assume that you had a ticket for a basketball playoff game that you bought for 50, the maximum price you were willing to pay.
 
  If a friend of yours offers to buy the ticket for 100 but you decide not to sell it, how can your decision be explained?
  A) by the endowment effect
  B) You expect to receive greater utility from attending the playoff game than you received from buying the ticket.
  C) by the law of diminishing marginal utility
  D) The income effect from the increase in the price of the ticket from 50 to 100 was greater than the substitution effect.

Question 2

The ABC Company manufactures routers that are used to provide high-speed Internet service. ABC sells an average of 1,000 routers each month, but to exhaust economies of scale in its industry ABC would have to sell 3,000 routers each month.
 
  Therefore
  A) ABC will soon go out of business.
  B) to reach minimum efficient scale ABC would have to sell at least 3,000 routers each month.
  C) ABC is experiencing diminishing returns.
  D) ABC is experiencing diseconomies of scale.


mcinincha279

  • Sr. Member
  • ****
  • Posts: 316
Answer to Question 1

A

Answer to Question 2

B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Hippocrates noted that blood separates into four differently colored liquids when removed from the body and examined: a pure red liquid mixed with white liquid material with a yellow-colored froth at the top and a black substance that settles underneath; he named these the four humors (for blood, phlegm, yellow bile, and black bile).

Did you know?

The senior population grows every year. Seniors older than 65 years of age now comprise more than 13% of the total population. However, women outlive men. In the 85-and-over age group, there are only 45 men to every 100 women.

Did you know?

A headache when you wake up in the morning is indicative of sinusitis. Other symptoms of sinusitis can include fever, weakness, tiredness, a cough that may be more severe at night, and a runny nose or nasal congestion.

Did you know?

Over time, chronic hepatitis B virus and hepatitis C virus infections can progress to advanced liver disease, liver failure, and hepatocellular carcinoma. Unlike other forms, more than 80% of hepatitis C infections become chronic and lead to liver disease. When combined with hepatitis B, hepatitis C now accounts for 75% percent of all cases of liver disease around the world. Liver failure caused by hepatitis C is now leading cause of liver transplants in the United States.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

For a complete list of videos, visit our video library