Why are externalities associated with common property rather than private property?
What will be an ideal response?
When private property rights exist, individuals can take someone to court and collect damages when the actions of that person damage the individual's property. When the person has to pay damages, the externality is internalized. With common property, no one can exclude anyone else and there is no legal recourse for collecting damages from the person.
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If output is increased beyond the point where total profit is maximized,
A. marginal profit will be zero. B. marginal profit will be negative. C. marginal profit will be positive. D. MR > MC.
Along a supply curve: a. supply changes as price changes
b. quantity supplied changes as price changes. c. supply changes as technology changes. d. quantity supplied changes as technology changes.
Innovation that improves machinery, power sources and other capital equipment will increase the demand for labor in the short run
a. True b. False Indicate whether the statement is true or false
When economists assume that people are rational, they assume that
a. consumers maximize profits. b. firms maximize revenues. c. consumers maximize utility. d. firms maximize output.