Some pollution occurs because property rights to some resources are well defined
a. True
b. False
B
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Answer the following statement(s) true (T) or false (F)
1. In the principal-agent problem, assigning full liability to the agent gives no incentive for the principal to avoid damages. 2. Transaction costs arise when property rights are nonexistent. 3. If all parties can enter into negotiations, social optimum is achieved with or without a Pigou tax. 4. A free-rider problem occurs when people can share in the benefits of an activity without being forced to contribute to its costs. 5. Court decision involving torts are irrelevant to social welfare.
Use the following table, which shows the aggregate demand and aggregate supply schedule for a hypothetical economy, to answer the next question.Real Domestic Output Demanded (in billions)Price Level (index value)Real Domestic Output Supplied (in billions)$500350$3,5001,0003003,0001,5002502,5002,0002002,0002,5001501,5003,0001001,000If the quantity of real domestic output demanded increased by $1,000 at each price level, the new equilibrium price level and quantity of real domestic output would be ________.
A. 150 and $2,500 B. 300 and $3,000 C. 250 and $2,500 D. 200 and $2,000
How would proponents of the efficient markets hypothesis use the Gordon-Growth model to explain the movement of stock prices during the Financial Crisis of 2007-2009?
What will be an ideal response?
Which of the following constitutes an implicit cost to the Johnston Manufacturing Company?
A. Payments of wages to its office workers. B. Rent paid for the use of equipment owned by the Schultz Machinery Company. C. Use of savings to pay operating expenses instead of generating interest income. D. Economic profits resulting from current production.