A do-it-yourself approach to production is more likely when
a. technology is complex
b. inputs are difficult to identify
c. resources cannot easily be measured
d. the price of inputs is known
e. contracts are complex
D
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Price cap regulation is defined as regulation that
A) imposes a price ceiling on the regulated firm. B) encourages firms to exaggerate costs to increase profits. C) uses marginal cost pricing to ensure efficient output. D) uses average cost pricing to ensure costs are covered. E) is essentially the same as rate of return regulation.
A legal arrangement characterized by preferential treatment of export industries is
a. export orientation b. export processing zone c. customs union d. effective protection e. none of the above
If borrowing is precluded, then beginning at age 18, the individual will consume
Consider an individual who enters adulthood and the labor force at age 18, expects to work 5 years at a real income of $10,000 per year, anticipates earning a real income of $40,000 per year from age 23 to 63, expects to retire with a $10,000 annual pension, and live until age 78. Suppose the interest rate is zero, and the individual seeks perfectly smooth consumption across his adult lifetime. a) $10,000 each year until age 23, then about $32,000 per year afterwards b) $10,000 every year c) all of his income as he receives it each year d) $10,000 per year until age 23, then $25,000 per year afterwards e) $25,000 every year
If market participants believe next year's corn crop is likely to be unusually large:
A. it will be impossible to find someone to take the long position in a futures contract. B. the current spot market price of corn is likely to be above the futures price of corn. C. the current spot market price of corn is likely to be below the futures price of corn. D. it would be impossible to find someone to take the short position in a futures contract.