Marginal revenue is
A. change in total revenue/output.
B. total revenue/output.
C. change in total revenue/change in output.
D. total revenue/change in output.
Answer: C
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Network externalities
A) prevent the dominance of a market by one firm. B) are created when celebrity endorsements of products lead to a surge in the demand for those products. C) exist when the usefulness of a product increases with the number of consumers who use it. D) can only exist when there are economies of scale.
Which of the following statements about Coasian reasoning is true?
a. Coasian reasoning lacks symmetry, it does not provide a starting point for negotiations toward an efficient outcome. b. Coasian reasoning emphasizes on the benefits received by the person having more rights compared to the others in the group. c. Coasian reasoning explains how the costs and benefits of a transaction are distributed among the parties. d. Coasian reasoning provides a starting point for negotiations toward an efficient outcome, if the cost of negotiation is low.
If an externality is created by a single person or firm, and affects only a single person or firm, then
a. it is referred to as a single externality b. the inefficiency caused by that externality may be resolved by those two parties c. the externality takes the form of a side payment d. Pareto efficiency is guaranteed e. fairness dictates that the externality be removed
The interest rate promised when a bond is issued is called the:
A. coupon rate. B. real rate of interest. C. discount rate. D. dividend rate.