Most markets involve the use of money for transactions because:
a. goods and services can be exchanged more easily with money than without it.
b. goods and services cannot be exchanged without money.
c. using money requires a double coincidence of wants.
d. the transaction costs of using money are very high.
e. the value of money remains same across countries over time.
a
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Mary is willing to pay $50 for a Christmas tree, John is willing to pay $45 and Jeff is willing to pay $40. The price of a tree is $40. The total consumer surplus for Mary, John and Jeff taken together is
A) $15. B) $135. C) $40. D) $95. E) $120.
On the vertical axis, the production possibilities frontier shows ________; on the horizontal axis, the production possibilities frontier shows ________
A) the quantity of a good; the number of workers employed to produce the good B) the quantity of a good; the price of the good C) the quantity of a good; a weighted average of resources used to produce the good D) the quantity of one good; the quantity of another good
If a company dumps pollution in the water and fishermen are hurt and if transactions costs are prohibitively high and efficiency is the most important criteria,
A. the company should be made liable for the damage. B. the company should be taxed enough so the government can keep the river clean. C. liability should be placed on the group that has the least cost of solving the problem. D. the company should be allowed to pollute because a river is not private property.
Suppose that Clint wins the lottery jackpot of $300 million. He can receive it over the next 30 years in annual payments of $10 million, or he can receive a lump sum of $100 million immediately. Assuming that taxes are not a consideration, should Clint
take his winnings as a lump sum? A. Yes, but only if rapid inflation is expected over the next 30 years. B. Yes, but only if deflation is expected over the next 30 years.. C. No, the rate of return will always be higher with the 30 annual payments. D. Yes, if he can invest in financial assets that will yield greater returns than the interest rate implicit in the annual payments.