• 1. What will happen to Teresas profit given that Tanny is now in the market?
• a.Teresa's profit increases
• b.Teresa's profit decreases
• c. Teresa;'s profit stays the same
• d. None of the above

• 2. Suppose that a NY Times article indicates that wild salmon indicates that wild salmon is a healthy food because it provides lots of omega 3 nutrients. During the same period, the number of wild salmon returning to spawn in Alaska has grown dramatically.

The combination of events listed above:

a. will unambiguously cause the equilibrium number of wild salmon caught to fall

b.will unambiguously cause the equilibrium number of wild salmon caught to rise

c.may cause the equilibrium number of wild salmon caught to rise or fall

d.will have no impact on the equilibrium number of wild salmon

• 3. Suppose that a NY Times article indicates that wild salmon indicates that wild salmon is a healthy food because it provides lots of omega 3 nutrients. During the same period, the number of wild salmon returning to spawn in Alaska has grown dramatically.

The combination of events listed above:

a. will unambiguously cause the equilibrium price of wild salmon to rise

b.will unambiguously cause the equilibrium price of wild salmon to fall

c.will unambiguously cause the equilibrium price of wild salmon to fall

d.may cause the equilibrium price of wild salmon to rise, fall, or remain the same

4.Suppose that a NY Times article indicates that wild salmon indicates that wild salmon is a healthy food because it provides lots of omega 3 nutrients. During the same period, the number of wild salmon returning to spawn in Alaska has grown dramatically.

• Now suppose that an entrepreneur finds a way to raise salmon at a much lower cost than had previously been the case. Assume that most consumers believe that wild salmon and domestic salmon are similar products. This technological change:
• a.will unambiguously raise the equilibrium price of wild salmon
• b.will unambiguously lower the equilibrium price of wild salmon
• c.will have no impact on the equilibrium price of wild salmon
• d.may cause the equilibrium price of wild salmon to rise, fall, or remain the same