The theory that private negotiations have the potential to make some people better off without making anyone worse off when negative externalities are present is known as:
a. the Negative Externality Theorem.
b. the Sexton Theorem
c. the Coase Theorem.
d. the Abatement Theorem.
c
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One seamstress can sew 2 dresses per day and two seamstresses can sew 5 dresses per day. If the marginal revenue product of hiring the second seamstress is $360, then in a competitive product market
a. there are decreasing returns to scale b. there are diminishing returns to labor c. each dress sells for $120 d. the seamstresses are earning zero economic profits in the short run e. marginal cost of production is $120
When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease. B. prices, causing them to definitely rise. C. output, causing it to definitely increase. D. prices, causing them to definitely fall.
If two goods, X and Y, are complements, then which of the following statements is FALSE?
A. An increase in the price of X causes the demand for Y to rise. B. A decrease in the price of Y causes an increase in the demand for X. C. They are consumed together. D. When the quantity demanded of X increases, the demand for Y increases.
Assume an industry, currently dominated by one firm, experiences a large decline in fixed costs. This will
A) make entry of other firms more likely. B) make entry of other firms less likely. C) serve as higher barrier to entry. D) induce the incumbent firm to exit the industry.