Airlines charge higher fares to customers travelling for business than for leisure. This is an example of O benefits principle O deadweight loss O negative externality price discrimination O progressive taxationLaura earns more than John and does so in a legitimate way. Both have similar backgrounds and endowments. Which economic philosophy would argue against redistributing income from Laura to John? 1. liberalism 2. libertarianism 3. socialism 4. utilitarianism 5. none of the above 0 liberalism libertarianism O socialism O utilitarianism 0 none of the other options In the perfectly competitive market for mobile phone production all firms have access to the same technology. Suppose that the mobile phone industry starts from a long run equilibrium and has decreasing marginal costs. Assume that a demand is affected by a positive shock. O In the short run, the number of firms doesn't change, prices increase and profits increase O In the short run, the number of firms doesn't change, prices decrease and profits decrease O In the long run, the number of firms increases (firms enter the market), prices increase and profits increase O In the long run, the number of firms increases (firms enter the market), prices decrease and profits go to zero O Both a) and d)Assuming long run equilibrium, monopolistically competitive firms are inefficient because: O they do not set marginal cost equal to marginal revenue O their market power allows them to earn profits O they generate negative externalities with product variety they are producing too little to minimize production costs O they encourage competitors to enter the market with similar productsSuppose that you are selling your old laptop in the second hand market and you know that if RAM are not overwhelmed, the computer's probability of not breaking down is 95%. The buyer can: -Use the laptop carefully by not downloading too many applications that overwhelm the RAM. In this case the laptop will break down 5% of the times. -Disregard the laptop's memory constraint and overwhelm the RAM. In this case the laptop will break down 50% of the time. To signal the quality of your laptop, you provide a partial insurance that gives the buyer 1500$ towards replacing it with a new laptop, whose cost is 2500$. Assume that the buyer likes playing a videogame whose download overwhelms the computer RAM and gains a value of 200$ if he is able to do so. Will the buyer use the laptop carefully? Why? 0 Yes, because the cost of misusing the laptop for the buyer $2500'k O.5=$1250. This is higher than the value of misusing it ($200) Yes, because the cost of misusing the laptop for the buyer 1000$* 0.5=$500. This is higher than the value of misusing it ($200) 0 No, because the cost of misusing the laptop for the buyer $1000* O.5=$500. This is higher than the value of misusing it ($200) 0 No, because the cost of misusing the laptop for the buyer $1500* 0.5=$750. This is higher than the value of misusing it ($200) Assuming profit maximization, which of the following is not true: O monopolies are always less efficient producers than markets with more firms O monopolistically competitive firms cannot produce socially optimal quantities in the long run O monopolistically competitive firms cannot earn profits in the long run oligopolies can produce socially optimal quantities O effective collusion among firms requires enforcementThe Private Marginal Benefit of acquiring a university degree is 1000 - Q (where Q is the total number of persons obtaining a university degree). The Social Marginal Benefit is 3000 - Q. PMC = SMC = 100. To have the efficient number of persons obtain a university degree it will be necessary to: O Provide a subsidy of 2900 to each individual who acquires a university degree Set a maximum limit on the number of persons obtaining a university degree equal to 2900. O Require that at least 2000 people obtain a university degree. O Impose a tax of 2000 on each individual who does not obtain a university degree. Provide a subsidy of 2000 to each individual who acquires a university degreeThe Australian government wants to create a new income tax that collects 10% for all incomes between $10000 and $50000; 15% for income between $50001 and $100000; and 20% for incomes above $100000. What is the difference in the average tax rate (ATR) for one worker earning $75000 and the other $45000? What about the difference in the marginal tax rate (MTR) between them? O ATR difference 2.6%, MTR difference 5% O ATR difference 5.0%, MTR difference 5% O ATR difference 7.8%, MTR difference 10% O ATR difference 10.3%, MTR difference 10% O None of the other optionsScotland introduced a price floor for alcohol in 2018. Assume that heavy drinkers: - are likely to create the largest externalities from drinking, - buy a much greater fraction of their alcohol from cheap products - there are no close substitutes for alcohol Would a price floor be effective in reducing the externality? Yes the price floor would target predominantly heavy drinkers O No, because the price floor would target predominantly light drinkers No, because heavy drinkers would switch to more expensive alcohol O Yes, because light drinkers would switch to no-drinking