Scenario 15-6 The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die- hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc.   Refer to Scenario 15-6. How much profit will the concert promoters earn if they set the price of each ticket at $150?  $75,000 $100,000 $150,000 $175,000

Which of the following is a characteristic of a monopoly? low fixed costs as a portion of total costs free entry and exit barriers to entry declining marginal cost

  What is the price and quantity for the monopoly P = $8, Q=5 P=$7, Q=6      P=$10, Q=8    P=$10, Q=5

A monopoly   takes the market price as given and earns small but positive profits can set the price it charges for its output but faces a downward-sloping demand curve so it cannot earn unlimited profits can set the price it charges for its output but faces a horizontal demand curve so it can earn unlimited profits can set the price it charges for its output and earn unlimited profits

A natural monopoly is one where   1.    Governments will create a minimum price in the market 2.  Companies are granted temporary monopolies to incentivize innovation 3.  It is cheaper for only company to provide for the entire market than many sellers   4. average fixed costs are low and average variable costs are high  

Suppose that in a competitive market the equilibrium price is $2.50. What is marginal revenue for the last unit sold by the typical firm in this market? 1. exactly $2.50 2. less than $2.50 3. more than $2.50 4. the marginal revenue cannot be determined without knowing the actual quantity sold by the typical seller    

An example of an explicit cost of production would be the   1.  cost of labor earnings from a previous job for an entrepreneur.   2.  lost opportunity to invest in capital markets when the money is invested in one’s business.   3.  lease payments for the land on which a firm’s factory stands.   4.  Both a and c are correct.

Karen’s cat causes Danny to Karen values her cat’s companionship at $300 per year. The cost to Danny of tissues and her allergy medication is $350 per year. Based on the Coase theorem,   Karen should pay Danny $350 for tissues and allergy medication Danny should pay Karen $325 to give away her cat Danny should move to another location Karen should pay Danny $400 so that she may keep her cat

The example of organ donations was used to the explain 1. the endowment effect 2. the paradox of choice 3. choice architecture 4. the power of default options

Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that marginal cost of the third worker hired is $40, and the average total cost when three workers are hired is $50. What is the total cost of production when three workers are hired?   1.  $50   2.  $90   3.  $120   4.   $150