Encouraging formation of monopolies provides firms an incentive ...

[tsand2]

Encouraging formation of monopolies provides firms an incentive to:
 
  A) innovate.
  B) increase social surplus.
  C) hire less resources in production.
  D) decrease deadweight loss.

Question 2

Refer to the table below. Given that an individual's opportunity cost of time is 30 per hour, which of the two apartments should she rent?
 
  Apartment Monthly Commuting Time (Hours) Monthly Rent ()
  1 60 3,600
  2 20 4,500

[peilian]

Answer to Question 1

A

Answer to Question 2

The opportunity cost of commuting per month from Apartment 1 = 60  30 = 1,800.
Total monthly cost of renting Apartment 1 = 1,800 + 3,600 = 5,400.
The opportunity cost of commuting per month from Apartment 2 = 20  30 = 600
Total monthly cost of renting Apartment 2 = 600 + 4,500 = 5,100
Therefore, the individual chooses Apartment 2 as she incurs a lower cost if she rents Apartment 2 than when she rents Apartment 1.

[tsand2]

YES! Correct, THANKS for helping me on my review

[bdobbins]

Excellent