O None of the above. There are no problems inherent with publik goods Question 1
ID: 2428891 • Letter: O
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O None of the above. There are no problems inherent with publik goods Question 15 (2.5 points) The reason that economists generally prefer tradable allowances over non-tradable quotas as a solution for common resources such as fisheries is because Otradable quotas are the only way to effectively Umit utiluization of the fishery resource O as opposed to non-tradable quotas, tradable allowances will tend to result in the fish being consumed by potential consumers with the greatest willingness to O as opposed to non-tradable quotas, tradable allowances will tend to result in the fish being caught by the suppliers wich the lowest costs Oas opposed to non-tradable quotas, tradable allowances will certainity resuit in the largest fish catches per fishing season Question 16 (2.5 points) The requirements for a markec to be considered approximately competitive inciudep) each firm seuang nearty identical products. Othere being many buyers and sellers in the marker,al of whom are smald reacive so the sice of the marke O many potenzial sellers in the industry, able to enter she market if they so choose All of the acove 4 5 6 3Explanation / Answer
16. The requirements for a market to be considered approximately competitive include each firm selling many identical products, there being many buyers and sellers in the market(all of whom are small relative to the size of the market), many potential sellers in the industry (able to enter the market if they so choose). Hence, option(D) i.e all of the above is correct.
19. Profit-maximising quantity is where P=MC. Therefore, Bottle-R-Us should produce 100 units. Hence, option(C) is correct.
20. Profit at profit maximising quantity = TR - TC = $(100-85)(100)= $ 1500.It is represented by the area of rectangle at that quantity between MC and ATC. Hence, option(D) is correct.
21. No, firm should not shut down the production in the short run because where P=MC , at that quantity level ,P>AVC. Hence, option(B) is correct.
22. Yes, Bottle-4-Us should exit the industry when possible i.e when ATC >P. Hence, option(A) is correct.
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