ECN 361 Week 7 Discussions plus Quiz
(ECN 361 Week 7)
ECN 361 Week 7 Discussion Question 1, Participation, Responses
In many college towns, private independent bookstores typically locate on the periphery of the college campus. However, in some college towns, the university has used political power to restrict private bookstores near campus through community zoning laws. Use your knowledge of markets to predict the price and quality of service differences in the market for college textbooks under the two different market regimes.
ECN-361 Week 7 Discussion Question 2, Participation, Responses
In markets where the government imposes an excise tax on unit sales, it also has a tendency to dabble with restrictions on advertising (for example, cigarettes and hard liquor). Do potential (or actual) restrictions on advertising in these markets serve the interest of a government that is interested in maximizing its tax revenue from the sale of these products? Explain your answer.
ECN 361 Week 7 Quiz (Questions & Answers)
- Question: A firm’s opportunity costs of production are equal to its
- Question: Adibok knows that it produces and sells high-quality athletic shoes. Wurkout knows that it produces and sells low-quality athletic shoes. According to the signaling theory of advertising,
- Question: Monopolistic competition is considered inefficient because
- Question: Table 17-5 The table shows the town of Driveaway’s schedule for gasoline. Assume the town’s seller(s) incurs a cost of $2 for each gallon no fixed cost. Refer to Table 17-5. If there are exactly five then which of the following outcomes is most
- Question: Figure 15-7 Refer to Figure 15-7. To maximize its profit, a monopolist would choose which of the following outcomes?
- Question: A monopoly can earn positive profits because it
- Question: In the long run, a monopolistically competitive firm produces a quantity that is
- Question: Figure 16-3 Refer to Figure 16-3. The firm in this figure is monopolistically competitive and maximizing profit. This firm
- Question: Which of the following is not an example of a barrier to entry?
- Question: Scenario 16-3 Consider the problem facing two firms, YumYum and Bertollini, in the frozen food Each firm has just come up with an idea for a new “frozen meal for two” which it would sell for $9. Assume that the marginal cost for each new product is a constant $2, and the only fixed cost is for advertising. Each company knows that if it spends $12 million on advertising it will get 1.5 million consumers to try its new product. YumYum has done market research which suggests that its product does not have any “staying” power in the market. Even though it could get 1.5 million consumers to buy the product once, it is unlikely that they will continue to buy the product in the future. Bertollini’s market research suggests that its product is very good, and consumers who try the product will continue to be consumers over the ensuing year. On the basis of its market research, Bertollini estimates that its initial 1.5 million customers will buy one unit of the product each month in the coming year, for a total of 18 million units. Refer to Scenario 16-3. If YumYum decides to advertise its product it can expect to
