Table 22-2 Three Longtime Friends-Allen, Brian, and Cody-Are Deciding How They Will

question 208

Multiple Choice

Table 22-2
Three longtime friends-Allen, Brian, and Cody-are deciding how they will spend their Sunday afternoon. They all agree that they should do one of three things: go to a movie, play golf, or go to a baseball game. They also agree that they will have two pairwise votes to determine how to spend their afternoon, with the majority determining the outcome on each vote. The first, second, and third choices for each person are as indicated in the table below.
-Refer to Table 22-2. If (1) the first vote pits "baseball game" against "golf," and (2) the second vote pits "movie" against the winner of the first vote, then

• A)"Baseball game" wins the first vote and "baseball game" wins the second vote, so they go to a baseball game.
• B)"Baseball game" wins the first vote and "movie" wins the second vote, so they go to a movie.
• C)"golf" wins the first vote and "golf" wins the second vote, so they play golf.
• D)"golf" wins the first vote and "movie" wins the second vote, so they go to a movie.

Understand the concept of economies of scale as it applies to monopolistic markets.

Understand the fundamental characteristics of monopolies, including demand curves and industry supply.

Recognize the role of economies of scale and natural monopolies in the industry.

Distinguish between short-run and long-run profit maximization strategies for monopolists.

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Definitions:

Legitimacy

The recognized right or acceptance of an authority, rule, or agreement as valid and proper.

Authority

The legitimate or socially approved use of power within a given role, institution, or situation.

Subsistence groups

Communities or social groups that rely on natural resources and their immediate environment for their food, shelter, and clothing, often through hunting, gathering, fishing, or subsistence agriculture.

Distribution

The way in which something is shared out among a group or spread over an area.