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Where a typical U shaped AC curve is falling, the MC curve Select one: O a. must be falling O b. must be rising O c. have risen then fallen d. may be falling or rising

Where a typical U shaped AC curve is falling, the MC curve Select one: O a. must be falling O b. must be rising O c. have risen then fallen d. may be falling or rising

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter2: Choice In A World Of Scarcity
Section: Chapter Questions
Problem 19CTQ: Suppose Alphonsos town raises the price of bus tickets from 0.50 to 1 and file price of burgers...
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Where a typical U shaped AC curve is falling, the MC curve Select one: a. must be falling must be rising have risen then fallen may be falling or rising O b. c. d.
Transcribed Image Text:Where a typical U shaped AC curve is falling, the MC curve Select one: a. must be falling must be rising have risen then fallen may be falling or rising O b. c. d.
Suppose that Maria wants to dine at a fancy restaurant, but the only available table is in the smoking section. Maria dislikes the smell of cigarette smoke. She notices that only one person, John, is smoking in the smoking section. Maria values the absence of smoke at $25. John values the ability to smoke in the restaurant at $15. Which of the following represents an efficient solution in the absence of transaction costs? Select one: a. Only a government policy banning smoking in restaurants will solve this problem. O b. John continues to smoke because he has a right to smoke in the smoking section. C. Maria offers John between $15 and $25 not to smoke. John declines because he has a right to smoke in the smoking section. O d. Maria offers John between $15 and $25 not to smoke. John accepts, and both parties are better off.
Transcribed Image Text:Suppose that Maria wants to dine at a fancy restaurant, but the only available table is in the smoking section. Maria dislikes the smell of cigarette smoke. She notices that only one person, John, is smoking in the smoking section. Maria values the absence of smoke at $25. John values the ability to smoke in the restaurant at $15. Which of the following represents an efficient solution in the absence of transaction costs? Select one: a. Only a government policy banning smoking in restaurants will solve this problem. O b. John continues to smoke because he has a right to smoke in the smoking section. C. Maria offers John between $15 and $25 not to smoke. John declines because he has a right to smoke in the smoking section. O d. Maria offers John between $15 and $25 not to smoke. John accepts, and both parties are better off.
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