Rebecca and Leah are roommates. Rebecca likes to study with the music playing loudly and Leah needs quiet when she studies. Rebecca would be willing to pay $5 a night to hear music while Leah would be willing to pay $10 a night for the quiet. In this situation
a. Leah should pay Rebecca $7.50 a night to not listen to music, because that would be a Pareto improvement
b. Rebecca should stop listening to music because that would be a Pareto improvement
c. There is no action that would create a Pareto improvement
d. Rebecca should pay Leah $7.50 a night to listen to music, because that would be a Pareto improvement
e. Leah should pay Rebecca $4.50 a night to not listen to music, because that would be a Pareto improvement
A
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One reason the supply and demand model might not be appropriate to the health-care industry?
A) Consumers do not have full information. B) Providers do not know the demand for health-care services. C) Consumers do not know how to value their own health. D) The costs of finding a doctor are too low.
The cross-price elasticity of demand for coffee and caskets is likely to be
A) less than zero. B) greater than zero. C) zero. D) infinity.