Refer to Scenario 18.1. Which of the following is TRUE? A) The ...

[lidoalex]

Refer to Scenario 18.1. Which of the following is TRUE?
 
  A) The factory will never agree to B, because that would leave them with much less profit than the fishermen.
  B) C will never occur because that would leave the fishermen with much less profit than the factory.
  C) If the factory refused to install a filter, the fishermen would refuse to install a treatment plant.
  D) The factory must install a filter, because they contaminate the water.
  E) The profits above indicate profit before any agreement is made, and profit varies enough to make a mutually acceptable agreement possible.

Question 2

Suppose there are ten identical manufacturing firms that produce computer chips with machinery (capital, K) and labor (L), and each firm has a production function of the form q = 10KL0.5. What is the industry-level production function?
 
  A) Q = 10K10L5
  B) Q = 100KL0.5
  C) Q = 100L0.5
  D) none of the above

[ergserg]

Answer to Question 1

E

Answer to Question 2

B