The Price Per Unit Is $1

question 108

Multiple Choice

The price per unit is $1.00. The average variable cost per unit is 60 cents. The total fixed cost is $20,000. Compute the break-even point.

• A) 75,000 units
• B) 50,000 units
• C) 20,000 units
• D) 33,334 units
• E) 40,000 units

Grasp the principles of the Coase theorem and conditions for its application.

Identify situations illustrating the free-rider problem and collective action issues.

Understand how liability rules and injunctions can be used to manage externalities.

Realize the role of government and private sector in regulating externalities through permits, taxes, and subsidies.

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Definitions:

Final Goods

Products that are completed and ready for sale to the end consumer.

Gross National Product

The total value of all goods and services produced by a country's residents over a specific time period, including income from overseas investments.

Services Provided

The actions or activities carried out by a company or an individual to satisfy a customer's needs or wants.

Human Development Index

An index measuring three basic dimensions of human development: life expectancy, education, and per capita income indicators, used to rank countries into tiers of human development.