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In the town of Merryweather, citizens are very serious about their Christmas light displays. Consider each scenario and the type of good described.

Which is an example of tying?

Figure: Cleaners’ WagesHow many workers will this firm hire at a wage of $29?

An insurance company can prevent the adverse-selection death spiral by requiring purchasers to have a medical exam. This will allow the insurance company to:

Figure: Demand 2Two firms in an industry act as a cartel, with each firm agreeing to charge a price of $16 and sell 2 units of output. If one of them cheats and produces 2 more units of output, the cheating firm’s total revenue increases by _____ and the other firm’s total revenue decreases by _____.

A monopolistically competitive firm is able to charge P > MC because:

Figure: Demand 3 If the two-firm oligopoly facing the market in this diagram is currently producing at the competitive output level and one of the firms reduces output by 4 units, the firms’ profits would increase from:

Companies that rate goods and services, like Consumer Reports and Moody’s, face a problem because the easy dissemination of information makes their products resemble a(n):

Why are perfectly competitive firms less likely to advertise than monopolistically competitive firms?

The tendency for people with health insurance to consume more costly health care is an example of: