Assuming economic efficiency is maximized, when will more of a resource tend to be used in the first time period (as compared to future time periods)?
a. Whenever the discount rate is positive
b. Whenever the marginal net benefits in the present are positive
c. Whenever the discount rate is zero
d. Whenever the user costs are positive in the present
e. Whenever the marginal net benefits in the future are negative
Answer: a. Whenever the discount rate is positive
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A professional basketball franchise is trying to assemble a parcel of land to build an arena. There are 25 houses on the land the franchise needs. In this case,
A) eminent domain can reduce transactions costs and make a pie-increasing arena possible. B) eminent domain can reduce the likelihood of holdouts and make a pie-increasing arena possible. C) eminent domain is not called for as the land can probably be acquired more efficiently through bargaining. D) Both A and B are correct.
Because women have a longer average life span than men, they are paid
A) higher monthly retirement benefits by a defined benefit pension plan. B) lower monthly retirement benefits by a defined benefit pension plan. C) the same monthly retirement benefits by a defined benefit pension plan. D) the amount of monthly benefits paid to men and women by a defined benefit plan is determined by each company.
The Sherman Antitrust Act of 1890
(a) did not specify what economic actions are legal. (b) said that only competitive economic actions were legal. (c) declared illegal every combination in restraint of trade. (d) declared none of the above.
The idea behind money as a standard of value is that use of money allows:
a. greater efficiency in exchange b. receipt of income to be separated from spending. c. persons to hold spending power for some period of time. d. prices quoted in money terms.