Existing teams have the bargaining power to induce cities to build stadiums for them because of the
A. ease of obtaining expansion franchises.
B. fact that they have won national championships.
C. difficulty of obtaining expansion franchises.
D. fact that land in some urban areas is still relatively cheap.
Answer: C
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Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. What is the marginal benefit to society from the fourth satellite?
A) $36 B) $20 C) $18 D) $4
Social Security payments were:
A. not originally adjusted for inflation, causing the real value to retirees to increase over time. B. not originally adjusted for inflation, causing the real value to retirees to decrease over time. C. originally adjusted for inflation, causing the real value to retirees to increase over time. D. originally adjusted for inflation, causing the real value to retirees to decrease over time.
All other factors equal, if the costs of converting bonds and other financial securities to a means of payment increase:
A. it shouldn't impact the transactions demand for money. B. nominal interest rates should decrease. C. the transactions demand for money should increase. D. the transactions demand for money should decrease.
Suppose that it would cost a firm $10 million to develop a new drug. In the absence of a patent, other firms will be able to copy and bring to market a generic equivalent of the drug in three years. In each of these three years, the firm would earn monopoly profits of $3 million. A patent will generate monopoly status for the firm for twenty years. If the government knew this information ahead of time, which of the following is most correct?
A. The government should not grant a patent to the firm, because the firm would earn monopoly profits for three years even without the patent. B. The government should not grant a patent to the firm, because monopoly leads to efficiency losses relative to the competitive market. C. The government should grant a patent to the firm, because even with a patent the firm will not earn a monopoly profits. D. The government should grant a patent to the firm, because the firm would not produce the drug at all without a patent.