To an economist, risky options:
A) are always bad options.
B) are always good options.
C) have costs and benefits fixed in advance.
D) do not have costs and benefits fixed in advance.
D
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An exclusion contract
A) is a form of entry deferral. B) gives a firm the right to be the exclusive provider of a good in a particular market. C) may not always be profitable for the incumbent. D) All of the above.
Marginal social cost is equal to
a. total private cost b. marginal private cost c. marginal external cost d. marginal private cost plus marginal external cost e. marginal private cost divided by marginal external cost
If the production of ukuleles creates a negative externality that is NOT corrected for by the government, the equilibrium quantity of ukuleles is
A) higher than optimal. B) lower than optimal. C) efficient. D) at a optimal level.
A firm can reduce its expected legal costs by negotiating an advance pricing agreement (APA) with the IRS. However, filing an APA can expose the firm to considerable risk by giving the government access to its sensitive cost-related information. This is an example of the ________ that arise due to regulation.:
A. legal costs B. information asymmetries C. positive externalities D. opportunity costs