Did Mother Teresa create positive externalities when she helped the poor of Calcutta?
A) No, because the poor continued to exist and her efforts were largely unsuccessful.
B) No, because she fully calculated all the benefits of her activities.
C) Yes, because her activities have inspired and benefited countless others whom Mother Teresa could not have known about or taken into account.
D) Yes, because her activities had nothing to do with the search for economic profit.
C
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Comment on the following statement: "The shape of the long-run average cost curve is determined by diminishing returns."
What will be an ideal response?
Why is the prisoner's dilemma game useful in studying oligopoly behavior?
A) Because oligopolies make out like bandits. B) To illustrate the problems encountered when making decisions under uncertainty. C) To show that oligopolies behave as monopolists in the long run and earn positive economic profits. D) To illustrate how barriers to entry lead to economic profits.
Jim is haggling with a car dealer over the sale price of a used car. When he entered the store he was the only customer. During the negotiations, a second customer walks in and is interested in that particular car. At this point
a. Jim has a better chance of having his offer accepted, since the seller does not have any outside offers b. Jim has lower chances of having his offer accepted, since the seller has more outside offers c. The disagreement value for the seller has increased d. This should not impact Jim's chances of having his offer accepted
Explicit costs are costs that:
A. require a firm to spend money. B. are zero when no output is produced. C. do not depend on the quantity of output produced. D. depend on the quantity of output produced.