Which of the following do firms take advantage of to maintain high profits?
A. People tend to gravitate toward the default option.
B. The government only fines companies that have over $2 million in sales each year.
C. There is relatively little government oversight in the marketplace.
D. People are unaffected by default options.
Answer: A
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Stuck in Cleveland You purchased a roundtrip ticket to a friend's wedding in Cleveland on Saturday for $400, but on Sunday you discover your return flight is canceled due to weather. The airline will not be able to get you back home until late Monday but Greyhound has an overnight bus route that arrives at 6:00am Monday for $60 . What is the opportunity cost of missing work on Monday?
Suppose that Steve and Susie each perceives $200 of marginal benefit from a proposed new park, whereas Elizabeth perceives $800. If the proposed tax levied on each for the park would be $300, a majority vote will:
A. defeat this project and resources will be underallocated to it. B. defeat this project and resources will be efficiently allocated. C. pass this project and resources will be underallocated to it. D. pass this project and resources will be overallocated to it.