In the presence of asymmetric information,
A) all contracts are efficient.
B) efficiency in risk bearing cannot be achieved.
C) a trade-off exists between risk-bearing efficiency and production efficiency.
D) no contracting will take place.
C
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The lower the price elasticity of foreign supply of a country's imports
A. the lower will be tariff revenue of the government of the imposing country. B. the lower will be the prohibitive tariff imposed by this country. C. the higher will be the optimum tariff imposed by this country. D. the higher will be the fluctuation in the availability of the imported goods in this country.
In the chapter you read that it costs the U.S. Treasury's Bureau of Engraving and Printing around 5-1/2 cents to print a $1 bill, 10-1/2 cents to print a $20 bill, and a bit over 14 cents to print a $100 bill. It seems the Treasury could generate a nice profit for the government by simply printing currency and using this currency to purchase the goods and services the government needs. In fact, this seems to be a way to eliminate the problem of budget deficits for the U.S. government. Comment on this idea.
What will be an ideal response?
TC -TVC =
A. AFC. B. ATC. C. TFC. D. AVC.
Refer to Scenario 13.1 below to answer the question(s) that follow. SCENARIO 13.1: The government of Catalina Island is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P = 55 - 0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR = 55 - 0.02Q. Universal Entertainment is interested in bidding for the right to provide cable service on Catalina Island. It has a constant average and marginal cost of $15 for providing cable service to each household.Refer to Scenario 13.1. If Universal Entertainment were to be awarded the exclusive right to provide cable
service on Catalina Island, how much profit would it earn? A. $0 B. $40,000 C. $70,000 D. $80,000