Suppose That the Cost of Capturing a Cockatoo and Transporting

question 13

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

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Definitions:

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Null Hypothesis

A statement or hypothesis that suggests there is no statistical significance in a set of given observations, essentially a default or initial hypothesis.

Alternative Hypothesis

The hypothesis that proposes a significant difference exists between groups or variables, contrasting the null hypothesis.

Unemployment Rate

The unemployment rate is the percentage of the labor force that is jobless and actively seeking employment.