When deciding on output levels, members of a cartel
A) set their output where MR = MC.
B) produce the same level of output as if they were in a competitive market.
C) take into account the impact of changes on members' profits.
D) act as if they were monopolies.
C
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Using the Coase theorem, why might a firm that currently pollutes a river no one owns pollute the river less if it owned the river?
What will be an ideal response?
Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. Kate is considering whether to play the second game. If Kate only cares about the expected value of the outcome and does not care about risk, she should:
A. compare the cost of playing the game with the value of her time. B. play if the cost of playing the game is greater than the expected value of the payoff. C. not play since she never wins anything. D. play if the cost of playing the game is less than the expected value of the payoff.