At a price of $15, a firm sells 80 Blu-ray discs per day. If the slope of the demand curve is 0.10, marginal revenue is $5.
Answer the following statement true (T) or false (F)
False
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Refer to Pollutants. Suppose transactions costs preclude the possibility of private bargaining between the chemical plant and the farm. Which liability rule will not result in an efficient outcome?
A chemical plant's production adds pollutants to a stream which irrigates a farm's crops. The pollutants damage the farm's crops, increasing the firm's costs by $800 per month. The crop damage may be eliminated in two ways: the chemical plant can install a new filtering system costing $300 per month, or the farm can install a new irrigation system costing $600 per month. a. The chemical plant bears all liability for the crop damage. b. The farm bears all of the costs of the crop damage. c. The chemical plant bears 50% of the liability, while the farm bears the other 50% of the crop damages. d. The Coase Theorem guarantees that any assignment of liability will result in an efficient outcome.
If one adopts a pure free-market approach to depletable resources, then one can expect the price of resources to
A. rise steadily. B. fall steadily. C. fluctuate in a random-walk fashion. D. remain unchanged.
"The global financial crisis has had a considerable impact on China's export growth, which will continue to show weakness with recession in the US and Europe," said a report by JP Morgan & Co. If Chinese exports continue to decline, the AE curve will shift __________, the price level will __________ in the short run and real GDP will __________ in the short run.
a) upward; decrease; decrease b) downward; decrease; decrease c) upward; decrease; not change d) downward; decrease; not change
Explain why for speculation, the purchase of an option may be more attractive than a futures contract or the outright purchase of the underlying asset.
What will be an ideal response?