How do property rights help organize production and trade?
What will be an ideal response?
Property rights are necessary in order for people to specialize. If people specialize in production, they will want to consume more than just what they produce. Without property rights, people would worry that someone else would take their production, leaving them with little or nothing to trade for the other goods and services they want to consume.
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A perfectly price discriminating monopolist charges each buyer:
A. more than his or her reservation price. B. exactly his or her marginal cost. C. the perfectly competitive equilibrium price. D. exactly his or her reservation price.
Explain the following statement: For the same individual, tastes over goods may vary at the margin as we move from one bundle to another.
What will be an ideal response?
Worker discrimination occurs when
A) workers refuse to perform risky tasks. B) employers pay different employees different wages based on race. C) workers refuse to work with persons of a different race. D) customers refuse to buy products produced by a racially diverse workforce.
A price ceiling is non-binding when.
A. it is set above the equilibrium price. B. it is set below the equilibrium price. C. it reduces the output in a market. D. it increases the output in a market.