Compare two situations. (A ) A firm is not legally responsible for damages that result from air pollution caused by its production of steel. (B ) A firm is legally responsible for damages that result from its production of steel
Ronald Coase argued that if the property rights are assigned and transactions costs are low
A) bargaining between the firm and the victims of the air pollution caused by the firm would lead to an equal reduction in pollution in situation (A ) and situation (B ).
B) bargaining between the firm and the victims of the air pollution caused by the firm would lead to a greater reduction in pollution in situation (A ) than situation (B ).
C) bargaining between the firm and the victims of the air pollution caused by the firm would lead to a smaller reduction in pollution in situation (A ) than situation (B ).
D) bargaining between the firm and the victims of the air pollution caused by the firm will result in little reduction of pollution in either situation (A ) or (B ) because the firm has greater economic and political power than the victims.
A
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Which of the following statements is true of the world price of a good?
A) It is determined by the World Bank. B) It is determined by the intersection of the world supply and world demand curves for the good. C) It is always less than the domestic price of the good in the country that exports the good. D) It is always greater than the domestic price of the good in the country that imports the good.
If a 1 percent increase in price causes a 2 percent increase in quantity supplied, then supply is
A) elastic. B) inelastic. C) unit elastic. D) infinite.
An increase in income causes the demand for inferior goods to_____________ and the price of inferior goods to ____________
a. Increase; increase b. Increase; decrease c. Decrease; increase d. Decrease, decrease
A nonexclusive good is a good which:
a. is sold in low-price markets. b. is impossible to keep people from enjoying the benefits the good provides. c. is produced by a perfectly competitive firm. d. is produced at the lowest possible cost.