The Pacific Pulp Company plans to clearcut 100 acres of land to produce paper pulp which would earn the firm $50,000 in profits. One hundred nearby homeowners realize that this would reduce the value of each of their properties by $1,000. These 100 homeowners
a. face a logistical problem of getting together to offer a bribe to Pacific Pulp.
b. would not benefit from offering any side payment to Pacific Pulp not to clearcut.
c. have no legal option except to suffer the damages to their property values.
d. can costlessly organize to offer Pacific Pulp a side payment not to clearcut.
a. face a logistical problem of getting together to offer a bribe to Pacific Pulp.
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Producers of DVDs are able to lower the wage rate that they pay to their workers. You predict that the
A) price will rise. B) quantity supplied will decrease. C) supply curve will shift leftward. D) supply curve will shift rightward.
Even if your college degree is irrelevant to an employer's needs, your high GPA might still get you the job because
A) the firm is not a profit maximizer. B) your GPA sends a signal about your quality as a worker. C) the firm will most likely make an adverse selection. D) the high GPA eliminates the possibility of moral hazard.
. An example of a nonrenewable resource would be:
A. trees. B. rivers. C. an oil deposit. D. All of these are examples of nonrenewable resources.
Which of the following factors affect vertical integration of firms?
a. The demand for the final product in the market. b. The market power of each firm in an industry. c. The number of firms in an industry. d. The transaction cost at each stage of production.