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:

Calorie Counts

Calorie counts refer to the measurement of energy in food and beverages, indicating the amount of energy that can be obtained through consumption.

Marginal Utility

The increase in contentment or utility received from the consumption of another unit of a good or service.

Consumption Behavior

Consumption behavior refers to the decision-making process and patterns through which consumers choose how to allocate their resources towards various goods and services.

Noncash Gifts

Items of value given to someone without the exchange of cash, often used in the context of philanthropy or gifts in kind.