The Following Table Shows the Marginal Revenues Earned by a Price

question 68

Multiple Choice

The following table shows the marginal revenues earned by a price discriminating monopolist from two different markets. Table 10.5

-Refer to Table 10.5.If marginal cost is $30 in both markets,what quantities will be supplied in each of the markets?

• A)4 units in market X; 1 unit in market Y
• B)4 units in market X; 2 units in market Y
• C)2 units in market X; 3 units in market Y
• D)3 units in market X; 3 units in market Y
• E)3 units in market X; nothing in market Y

Identify solutions to mitigate the problems of adverse selection and moral hazard.

Recognize the role of information asymmetry in economic transactions.

Understand the use of deductibles, co-pays, and premiums in insurance to manage risk.

Appreciate the significance of signaling and screening in reducing information asymmetry.

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Definitions:

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The overall capability of an individual to manage stress, adversity, or change effectively.

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The reliance on one's own capabilities, judgment, or resources rather than those of others.

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A type of paint that contains lead, a toxic metal, which can cause serious health issues, particularly in children when ingested or inhaled.

Inner-City

Urban areas close to the central business district of a city, often characterized by high-density residential buildings and sometimes lower socioeconomic status.