Use the Information Below to Answer the Following Question

question 41

Multiple Choice

Use the information below to answer the following question.
Fact 13.3.1
Suppose that at one of the Talbots shops,marginal cost of a coat is constant at $150,and total fixed cost is $3,000 a day.The shop maximizes its profit by selling 15 coats a day at $500 per coat.Then the shops nearby increase their advertising.The Talbots shop responds by spending $1,500 a day more on advertising its coats.As a result,its profit-maximizing number of coats sold increases to 25 a day at $400 per coat.
-Refer to Fact 13.3.1.As a result of increased advertising,Talbots' markup

• A)decreases by $100.
• B)increases by $50.
• C)increases by $75.
• D)decreases by $60.
• E)decreases by an unknown amount.

Understand the limitations of majority voting in reflecting the strength of voter preferences and its potential to lead to inefficient outcomes.

Describe the concept of regulatory capture and its implications on industry regulation and economic efficiency.

Analyze the impact of political behavior, including lobbying and vote trading (logrolling), on government decision making and policy outcomes.

Understand the concept of limited and bundled choice in elections and its implications for public choice.

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Definitions:

Total Allowable Catch (TAC)

A fishery management tool that sets a limit on the amount of a particular fish species that can be caught over a specified time period.

Catch Size

The quantity of fish or any other marine species that is caught within a particular period.

Resource Use

The way in which human societies utilize natural resources to fulfill their needs and wants.