Firm 1 Produces Output X with a Cost Function C₁(x)

question 6

Multiple Choice

Firm 1 produces output x with a cost function c₁(x) = x² + 10. Firm 2 produces output y with a cost function c₂(y, x) = y² + x. Thus, the more that firm 1 produces, the greater are firm 2's costs. Both firms face competitive product markets. The competitive price of x is $20 and the competitive price of y is $40. No new firms can enter the industry and the old ones must remain. The efficient Pigouvian tax on the x good is

• A) $0.
• B) $1.
• C) $2.
• D) $3.
• E) $4.

Understand conditions under which directive, participative, and supportive leadership behaviours are appreciated by employees.

Understand the concept of prototypes and their role in categorization.

Comprehend the various problem-solving strategies: insight, algorithms, and heuristics.

Recognize the influence of cognitive biases and heuristics on decision-making and judgments.

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Definitions:

Iroquois

A historically powerful northeast Native American confederacy, also known as the Haudenosaunee, made up of six nations including the Mohawk, Seneca, Cayuga, Onondaga, Oneida, and Tuscarora.

Patroonship

A grant of land and associated privileges given to wealthy individuals by the Dutch government in the 17th century to promote settlement and economic development in New Netherland (now parts of New York and New Jersey).

New Netherland

A 17th-century colonial province of the Dutch Republic that included parts of what are now the eastern United States.

Agricultural Labor

Work involved in cultivating and harvesting crops and raising animals, often performed by farmworkers and laborers.