Suppose That the Marginal Benefit of Having a Security Camera

question 48

Multiple Choice

Suppose that the marginal benefit of having a security camera in the library is given by MB,at the supermarket is given by MB₁ and at the museum is given by MB₂.All values are per week.
Suppose cameras are currently allocated efficiently.Now suppose that a camera at the museum malfunctioned and it will take two weeks to replace it.Owners of the supermarket would

• A)be willing to rent the museum a camera for less than the value of the camera to the museum.
• B)not be willing to rent the museum a camera for less than the value of the camera to the museum,but managers at the library would.
• C)not be willing to rent the museum a camera for less than the value of the camera to the museum,and neither would managers at the library.
• D)exploit the situation by renting a camera to the museum for more than $U per week.

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Definitions:

Annual Financial Statements

Comprehensive reports detailing a company's financial performance, status, and cash flows over a fiscal year.

Department of Labor

A branch of the U.S. government responsible for occupational safety, wage standards, unemployment insurance benefits, reemployment services, and some economic statistics.

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The procedure through which employees form or join a labor union to collectively negotiate with their employer regarding wages, working conditions, and other employment terms.

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