The Roomba 570 is a robotic vacuum cleaner made and sold by iRobot. It can vacuum 4 rooms on a single battery charge and it costs 2 of electricity to charge the Roomba.
Lynn is a house cleaner and can vacuum 4 rooms in 1 hour with a traditional vacuum. Suppose you want the 4 rooms in your house vacuumed once a week for one year. Ignoring the cost of any electricity Lynn uses, what is the maximum Lynn could charge per hour for you to choose her over the Roomba? A) 10.23 per hour
B) 20.45 per hour
C) 8.27 per hour
D) 16.54 per hour
Ques. 2The EU's antitrust chief in November 2008 fined car glass producers Asahi, Pilkington, Saint-Gobain and Soliver more than 1.3 billion euros (1.66 billion) for price-fixing, the largest sum ever levied by the EU for a cartel.
Price fixing is a violation of ________. A) price fixing legislation
B) antitrust law
C) Federal Trade Commission
D) Division of the U.S. Department of Justice
Ques. 3Rent seeking is best defined as attempts
A) by landlords to get tenants.
B) to achieve monopoly power and the resulting economic profit.
C) by individuals to avoid paying taxes.
D) by owners of a monopoly to sell the firm.
Ques. 4In the long-run equilibrium, perfectly competitive firms make zero economic profit because of
A) government regulations.
B) the ability of firms to enter and exit.
C) inefficient production processes.
D) high fixed costs.
Ques. 5Of the following, the best example of private information is when
A) Michael knows the price of a gallon of milk at the minimart but Michelle doesn't know.
B) you know some of your used car's defects but a potential buyer cannot find out about them until after buying.
C) you don't know the quality of a used car and must hire a trained mechanic who tells you all its defects.
D) you pay the owner of a used car a little extra and she lets you know all of the car's defects.
Ques. 6Based on the above figure, at which level of output does diminishing marginal returns first occur at Ike's Ice Cream Kitchen?
A) at 0 gallons
B) at 10 gallons
C) at 40 gallons
D) at 60 gallons
Ques. 7Farm subsidies in the European Union spill over to the rest of the world. Explain this assertion.
What will be an ideal response?
Ques. 8What are substitutes in production?
What will be an ideal response?
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