Suppose That the Cost of Capturing a Cockatoo and Transporting

question 5

Multiple Choice

Suppose that the cost of capturing a cockatoo and transporting him to the United States is about $40 per bird.Cockatoos are drugged and smuggled in suitcases to the United States.Half of the smuggled cockatoos die in transit.Each smuggled cockatoo has a 10% probability of being discovered, in which case the smuggler is fined.If the fine imposed for each smuggled cockatoo is increased to $1,000, then the equilibrium price of cockatoos in the United States will be

• A)$140.
• B)$90.
• C)$70.
• D)$311.11.
• E)$222.22.

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Definitions:

Production

The process of creating, manufacturing, or producing goods, services, or information, often involving a combination of labor, materials, and capital.

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An organization or structure that is recognized by the law as capable of rights and duties.

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Ethical standard refers to the principles that guide moral conduct within a profession or organization, outlining acceptable behaviors and practices that ensure fair and just operations.

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A legal entity that can own property and enter into contracts for the benefit of its shareholders.