June owns a farm, and has a right to spray it with pesticides. Unfortunately, the pesticides kill her neighbor’s bees and cost him $5,000 per year. June can use a spray that does not harm the bees for a cost of $2,000 more per year. What can June’s neighbor do that would demonstrate the Coase theorem?
a. Sue June for the $5,000 in damages.
b. Offer June $3,500 to spray the bee-friendly spray.
c. Find a way to do $5,000 damage to June’s farm.
d. Offer to pay $1,000 toward the bee-friendly spray.
b. Offer June $3,500 to spray the bee-friendly spray.
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Which of the following is TRUE for a single-price monopolist?
A) P > MR B) P < MR C) P = MR D) P = elasticity of demand
In 2004, hurricanes destroyed a large portion of Florida's orange and grapefruit crops. In the market for citrus fruit in 2004
A) the supply curve shifted to the left resulting in an increase in the equilibrium price. B) the demand curve shifted to the right resulting in an increase in the equilibrium price. C) the demand curve shifted to the left resulting in a decrease in the equilibrium price. D) the supply curve shifted to the right resulting in an increase in the equilibrium price.