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# Question 2 1pts In the Spring, James likes to spend afternoons at the park.What is his opportunity cost of him doing this?

Question 2

1 pts

In the Spring, James likes to spend afternoons at the park. What is his opportunity cost of him doing this?

No opportunity cost since he is doing an activity he enjoys

The opportunity cost is the value of the next best alternative of his time - how he would spend his afternoons if he wasn't at the park

The opportunity cost is the value of the sum of all other things he could do instead of going to the park

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Question 3

1 pts

Suppose that two players are playing the following game. Player A can choose either Top or Bottom, and Player B can choose either Left or Right. The payoffs are given in the following table where the number on the left is the payoff to Player A, and the number on the right is the payoff to Player B.

Does Player A have a dominant strategy? If so, what is it?

Top is a dominant strategy for Player A

Bottom is a dominant strategy for Player A

Both of the above

None of the above

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Question 4

1 pts

Does Player B have a dominant strategy? If so, what is it?

Left is a dominant strategy for Player B

Right is a dominant strategy for Player B

Both of the above

None of the above

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Question 5

1 pts

For the next four questions, you'll be asked whether a strategy combination is a Nash equilibrium or not. Player A plays Top and Player B plays Left

This is a Nash equilibrium

This is NOT a Nash equilibrium

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Question 6

1 pts

Player A plays Bottom and Player B plays Left

This is a Nash equilibrium

This is NOT a Nash equilibrium

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Question 7

1 pts

Player A plays Top and Player B plays Right

This is a Nash equilibrium

This is NOT a Nash equilibrium

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Question 8

1 pts

Player A plays Bottom and Player B plays Right

This is a Nash equilibrium

This is NOT a Nash equilibrium

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Question 9

2 pts

If each player plays her maximin strategy, what will be the outcome of the game?

Player A plays Top and Player B plays Left

Player A plays Bottom and Player B plays Left

Player A plays Top and Player B plays Right

Player A plays Bottom and Player B plays Right

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Question 10

2 pts

Now suppose the same game is played with the exception that Player A moves first and Player B moves second. Using the backward induction method discussed in the online class notes, what will be the outcome of the game?

Player A plays Top and Player B plays Left

Player A plays Bottom and Player B plays Left

Player A plays Top and Player B plays Right

Player A plays Bottom and Player B plays Right

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Question 11

2 pts

For the next five questions, consider a monopolist. Suppose the monopolist faces the following demand curve: P = 140 - 6Q. Marginal cost of production is constant and equal to \$20, and there are no fixed costs. What is the monopolist's profit maximizing level of output?

Q = 22

Q = 15

Q = 10

Q = 20

Q = 5

none of the above

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Question 12

2 pts

What price will the profit maximizing monopolist charge?

P = \$10

P = \$20

P = \$40

P = \$80

P = \$140

none of the above

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Question 13

2 pts

How much profit will the monopolist make if she maximizes her profit?

Profit = \$900

Profit = \$600

Profit = \$800

Profit = \$200

Profit = \$400

none of the above

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Question 14

2 pts

What is the value of consumer surplus?

CS = \$1400

CS = \$900

CS = \$600

CS = \$300

CS = \$200

none of the above

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Question 15

2 pts

What is the value of the deadweight loss created by this monopoly?

DWL = \$200

DWL = \$400

DWL = \$600

DWL = \$800

DWL = \$1000

none of the above

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Question 16

2 pts

These next five problems consider tax incidence. Suppose the market supply and demand for guitars in Happy Valley are given by:

Demand: P = 1000 - 0.25Q

Supply: P = 200 + Q

What is the equilibrium price and quantity of the product?

P* = 840, Q* = 640

P* = 733.25, Q* = 1067

P* = 760, Q* = 960

P* = 800, Q* = 600

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Question 17

2 pts

What is the price elasticity of demand at the equilibrium price?

Elasticity = -2

Elasticity = -3.333

Elasticity = -5.25

Elasticity = -0.5

none of the above

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Question 18

2 pts

For the next three questions, assume there is \$10 per unit tax levied on the consumers of guitars. What price will buyers pay after the tax is imposed?

\$850

\$842

\$830

\$855

none of the above

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Question 19

2 pts

What is the quantity of the good that will be sold after the tax is imposed?

630

640

626

632

none of the above

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Question 20

2 pts

What is the deadweight loss created by the tax?

DWL = \$80

DWL = \$8

DWL = \$10

DWL = \$64

none of the above

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Question 21

1 pts

NebraskaVirginiaWheat1215Cotton610

For the next nine questions, refer to the table above. Nebraska and Virginia each have 100 acres of farmland. The table gives the hypothetical figures for yield per acre in the two states. Who has the absolute advantage in the production of wheat?

Nebraska

Virginia

Both of the above

None of the above

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Question 22

1 pts

Who has the absolute advantage in the production of cotton?

Nebraska

Virginia

Both of the above

None of the above

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Question 23

1 pts

Who has the comparative advantage in the production of wheat?

Nebraska

Virginia

Both of the above

None of the above

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Question 24

1 pts

Who has the comparative advantage in the production of cotton?

Nebraska

Virginia

Both of the above

None of the above

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Question 25

1 pts

For the next four problems, you will find actual points on the combined PPC of the two states. You will be given a value of one good, and you must calculate the maximum amount of the other good that the two states could produce working together.

WheatCotton36020013001500

360 Wheat:

1160 Cotton

1280 Cotton

1420 Cotton

1600 Cotton

None of the above

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Question 26

1 pts

200 Cotton:

1400 Wheat

1600 Wheat

1800 Wheat

2000 Wheat

None of the above

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Question 27

1 pts

1300 Cotton:

500 Wheat

600 Wheat

700 Wheat

800 Wheat

None of the above

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Question 28

1 pts

1500 Wheat:

500 Cotton

600 Cotton

700 Cotton

800 Cotton

None of the above

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Question 29

1 pts

In Virginia, what is the marginal rate of transformation between wheat and cotton? (Assume wheat is graphed on the vertical axis.)

-0.5

-1

-1.5

-2

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