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| | Read and, if necessary, reread the above lecture. Then answer the following six questions: | | Read and, if necessary, reread the above lecture. Then answer the following six questions: |
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| − | 1. Suppose the cross elasticity of demand for goods A and B is +3.8, and for goods X and Y is -2.7. What can you conclude about the relationship of the goods A and B, and of X and Y? | + | 1. Suppose the cross elasticity of demand for goods A and B is +3.8, and for goods X and Y is -2.7. What can you conclude about the relationship of the goods A and B, and of X and Y (i.e., are they substitutes or complements)? |
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| − | 2. Suppose it costs you $500 to make your first 5 units, then $200 to make your next 5 units, and then $100 to make your next 5 units. Costs do not decrease further for you. What is the marginal cost for you to make another unit? | + | 2. Suppose it costs you $500 to make your first 5 units, then $200 to make your next 5 units, and then $100 to make your next 5 units. Costs do not decrease further for you. What is the marginal cost for you to make another unit, after you have made 12 units? Explain briefly. |
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| | 3. Suppose your annual income increases from $20,000 to $25,000. Suppose your demand for steak increases by 10% and your demand for fast food hamburgers decreases by 5%. Which type of goods are steak, and which type are hamburgers? | | 3. Suppose your annual income increases from $20,000 to $25,000. Suppose your demand for steak increases by 10% and your demand for fast food hamburgers decreases by 5%. Which type of goods are steak, and which type are hamburgers? |
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| − | 4. What does an owner do when his marginal revenue exceeds his marginal cost? Explain. | + | 4. What does an owner do once his marginal revenue exceeds his marginal cost? Explain. |
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| | 5. What does the Coase theorem say about the desirability, and the effect, of government regulations that increase transaction costs? | | 5. What does the Coase theorem say about the desirability, and the effect, of government regulations that increase transaction costs? |
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| − | 6. Take the online 10-question quiz covering the basic concepts learned in our entire course so far. If you have a smart phone such as an iPhone or Android, this quiz should work on that too. Your score is recorded electronically but also include the score as your answer to this question (e.g., 8 out of 10). | + | 6. Take the online 10-question quiz at www.conservaget.com . This quiz covers the basic concepts learned in our entire course so far. If you have a smart phone such as an iPhone or Android, this quiz should work on that too. Your score is recorded electronically but also include the score as your answer to this question (e.g., 8 out of 10). |
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| | == Honors == | | == Honors == |
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