there are 5 questions
Consider a market with two firms, Coke and Pepsi, that produce soft drinks. Both firms must choose whether to charge a high price ($1.25) or a low price ($0.65) for their soft drinks. These price strategies with corresponding profits are depicted in the payoff matrix to the right. Coke's profits are in red and Pepsi's are in blue. Coke's dominant strategy is to pick a price of $1.25 , and Pepsi's dominant strategy is to pick a price of Coke $ $1.25 Price = $1.25 Price = $0.65 What is the Nash equilibrium for this game? $775 $225 Price = $1.25 $775 $975 O A. Coke will choose a price of $0.65 and Pepsi will choose a price of $1.25. O B. Coke and Pepsi will both choose a price of $0.65. Pepsi O C. Coke will choose a price of $1.25 and Pepsi will choose a price of $0.65. $975 $500 Price = $0.65 D. Coke and Pepsi will both choose a price of $1.25. $225 $500Suppose that after hurricane Irene, the average income in Cape Charles, Virginia decreased by 4 percent. In response to this change in income, suppose the quantity of steak demanded in Cape Charles (holding the price of steak constant) decreased by 16 percent. What is the income elasticity of demand for steak in Cape Charles? The income elasticity of demand for steak in Cape Charles is . (Enter your response rounded to two decimal places.) In this instance, steak in Cape Charles is normal and a luxury normal and a necessity inferiorPizzas can be produced using either a small or large restaurant. The graph to the right shows the average total cost of producing pizzas using a small restaurant (ATCs) and a large restaurant (ATCL). ATGU 10.00- ATCS Suppose Claire plans on selling 600 pizzas. 9.00- If so, then Claire should choose to produce using a restaurant., where the average total cost of 8.00- production is $ . (Enter a numeric response using rounded to two decimal places.) 7.00- small 6.00- Cost (dollars per unit) large 5.00- 4.00- 3.00- 2.00- 1.00- 0 200 400 600 800 1000 1200 1400 1600 Quantity of pizzasFarmer Smith grows corn. The average total cost and marginal cost of growing corn for an individual farmer MC are illustrated in the graph to the right. 40- 36- Suppose the market for corn is perfectly competitive. If the market price is $24 per bushel, then to maximize ATC profits, farmer Smith should produce thousand bushels of corn. (Enter a numeric response using an 32 - integer.) 28 - 24- Price Price and cost (dollars per bushel) 20- 12- 10 20 30 40 50 60 70 80 90 100 Quantity of corn (bushels per month in 1000s)The graph to the right shows the effect of a tax imposed on soft drinks. Use this graph to answer the following questions. Which areas in the graph represent the excess burden (deadweight loss) of the tax? S2 OA. D + G Amount of Tax OB. C + D +G O C. B + C +D+G P2 OD. A + B + D+G Price (dollars) C . . . . ... .. ..... E . . .. Which areas represent the revenues collected by the government from the tax? H O A. B + C +E +F ................. OB. E + F +G D O C. E + F + G +H +I :Q2 :Q1 OD. A + B + C+D Quantity of soft drinks Would this tax on soft drinks be considered efficient? O A. No, because it imposes a large excess burden (deadweight loss) relative to the tax revenue it raises. O B. Yes, because it imposes a small excess burden (deadweight loss) relative to the tax revenue it raises. O C. Yes, because it imposes a large excess burden (deadweight loss) relative to the tax revenue it raises. O D. No, because it imposes a small excess burden (deadweight loss) relative to the tax revenue it raises
