Black Oil Company considered building a service station in a new location. The owners and their accountants decided that this was the profitable thing to do. However, soon after they made this decision, both the interest rate and the cost of building the station changed. In which case do these changes both make it less likely that they will now build the station?
a. Interest rates rise and the cost of building the station rises.
b. Interest rates rise and the cost of building the station falls.
c. Interest rates fall and the cost of building the station rises.
d. Interest rates fall and the cost of building the station falls.
a
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Common ownership of resources such as land can be efficient as long as
a. people are honest b. government regulates resource use c. rules for resource use are clear in assigning rights and responsibilities d. penalties for misuse are severe e. all the above are required
If the incentive to take advantage of a conflict of interest is high
A) removing the economies of scope that created the conflict may induce higher costs because of the decrease in the flow of reliable information. B) then the government must step in to remove the conflict. C) the costs of non-action in removing the conflict will always be higher than the cost of removing the conflict. D) firms will always step in and work to remove the conflict.
For a typical consumer, indifference curves can intersect if they satisfy the property of transitivity
a. True b. False Indicate whether the statement is true or false
To the extent that households are target savers who save to reach a specific goal, an increase in the interest rate ________ household saving and a decrease in the interest rate ________ household saving.
A. increases; decreases B. does not affect; increases C. increases; does not affect D. decreases; increases