The local coffee shop is collaborating with the neighborhood soup kitchen to raise funds to provide free meals. The coffee shop finds that compared to asking for donations at the register, people donate more if a donation amount is automatically added to the bill and customers are given the option to have it removed. What behavioral bias does this represent?

options:

	Risk Aversion
	Status Quo Bias
	Overconfidence
	Loss Aversion

Adam is a rational economic decision maker who enjoys eating ice cream from local shops. Ice cream is priced by the scoop, such that the marginal cost to Adam of the 3rd scoop of ice cream is $4. If Adam has chosen to eat only 2 scoops of ice cream, which of the following statements is true?

options:

	At this price no consumer will buy 3 scoops of ice cream
	Adam's marginal benefit of consuming the 3rd scoop is less than $4
	Adam would have had more ice creams scoops if he was looking to maximize his total net benefit
	Adam's marginal benefit of consuming the 3rd scoop is greater than $4

The incidence of an excise tax depends on the price elasticity of supply and the price elasticity of demand. If the price elasticity of demand is _______ and the price elasticity of supply is _______, then the excise tax is paid mainly by producers.

options:

	High (elastic), high (elastic)
	Low (inelastic), high (elastic)
	Low (inelastic), Low (inelastic)
	High (elastic), low (inelastic)

Consider the market for cheeseburgers above and suppose that a tax of $2 is levied on sellers.

What is the quantity transacted after the tax is imposed?

options:

	50
	75
	100
	25

Robert's current job pays an annual salary of $35,000. He also has $50,000 invested in mutual funds that pays $500 annually.

Robert's friend tells him of this great business venture that will will generate $86,000 in revenue. The business will cost $50,000 to set up and so Robert would have to sell his mutual funds and quit his job to start the business.

What is the Roberts economic profit from the business venture?

options:

	500
	36,000
	0
	50,500