Author Question: Assume that you had a ticket for a basketball playoff game that you bought for 50, the maximum price ... (Read 60 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?

The average adult has about 21 square feet of skin.

Did you know?

Approximately one in four people diagnosed with diabetes will develop foot problems. Of these, about one-third will require lower extremity amputation.

Did you know?

Street names for barbiturates include reds, red devils, yellow jackets, blue heavens, Christmas trees, and rainbows. They are commonly referred to as downers.

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

For a complete list of videos, visit our video library