In the absence of government interference, there is a constant marginal cost of $4 per ounce for growing marijuana and delivering it to buyers. Suppose that government authorities seize shipments whenever they find them and resell the marijuana that they seize on the open market. The probability that any shipment of marijuana is seized is 0.50. If a shipment is seized, there is no other punishment besides loss of the marijuana that is seized. The effect of the government action is to

Select one: a.lower the equilibrium price by $2. b. leave prices unchanged. c.raise the equilibrium price by $4. d.raise the equilibrium price by $8. e.raise the equilibrium price by $2.

On a tropical island there are 100 potential boat builders, numbered 1 through 100. Each can build up to 8 boats a year, but anyone who goes into the boatbuilding business has to pay a fixed cost of $7. Marginal costs differ from person to person. Where y denotes the number of boats built per year, boat builder 1 has a total cost function c(y) = 7 +y. Boat builder 2 has a total cost function c(y) = 7 + 2y, and more generally, for each i, from 1 to 100, boat builder i has a cost function c(y) = 7 +iy. If the price of boats is 15, how many boats will be built per year?

Select one:

a.168

b. Any number between 120 and 128 is possible.

c.32

d.112

e.64

The bicycle industry is made up of 100 firms with the long-run cost curve c(y) = 2 + (y₂/2) and 120 firms with the long-run cost curve c(y) =y₂/4. No new firms can enter the industry. What is the long-run industry supply curve at prices greater than $2?

Select one:

a.y= 360p.

b.y= 240p.

c.y= 170p.

d.y= 375p.

e.y= 340p.