In the fictional town of Wilsonville, there's a bustling local economy with numerous firms and households. The local bakery, owned by Mrs. Smith, is a favorite among the townspeople for its delicious pies. Mrs. Smith buys her fresh apples from the local orchard, which is owned by Mr. Johnson. Meanwhile, Mr. Johnson and his family are regular customers at Mrs. Smith's bakery, indulging in her pies every weekend. Use the diagram below to answer the question. Factor market G Households Good market What do arrows a and b represents? a) b) a-income; b-goods and services a-spending; b-factors of production c) a-spending; b-goods and services d) a-income; b-factors of production

Jane and Bill are apprehended for a bank robbery. They are taken into separate rooms and questioned by the police about their involvement in the crime. The police tell them each that if they confess and turn the other person in, they will receive a fighter sentence. If they both confess, they will be each be sentenced to 30 years. If neither confesses, they will each receive a 20-year sentence. If only one confesses, the they will receive 15 years and the one who stayed silent will receive 35 years. Table 10.7 below represents the choices available to Jane and Bill. If Jane trusts Bill to stay silent, what should she do? If Jane thinks that Bill will confess, what should she do? Does Jane have a dominant strategy? Does Bill have a dominant strategy? A = Confess; B = Stay Silent. (Each results entry lists Janes sentence first (in years), and Bills sentence second.)

Suppose the local electrical utility, a legal monopoly based on economies of scale, was split into four films of equal size, with the idea that eliminating the monopoly would promote competitive pricing of electricity. What do you anticipate would happen to prices?

What is predatory pricing?