As the variety of goods and services increases, barter becomes:
a. easier because the chance of there being a double coincidence of wants increases.
b. harder because the chance of there being a double coincidence of wants increases.
c. easier because the chance of there being a double coincidence of wants decreases.
d. harder because the chance of there being a double coincidence of wants decreases.
e. easier because people have more options to choose from.
d
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Double marginalization (first encountered in Chapter 4) complicates access pricing in telecommunications
Indicate whether the statement is true or false
Suppose you were working for Richstone's bakery and calculating whether the bakery was making a profit, considering the recent increase in rent. You have data for price (P), MR, ATC, MC, AVC, at the quantity of 1,000 breads a day. The firm's total profit is calculated by
a. P – AVC b. P – ATC c. P – MC d. (P – ATC)Q e. TR – TVC
In a perfectly competitive market, if price is less than average total cost, but greater than average variable cost at the level of output where marginal cost equals marginal revenue:
A. the firm is earning positive economic profit. B. the firm is earning negative economic profit. C. the firm should shut down. D. We cannot determine whether the firm is earning positive or negative profits.
If a positive externality is to be taken full advantage of, the:
A. consumer of the good should receive a subsidy equal to the marginal cost imposed on third parties that results from production (or consumption) of the good. B. producers' marginal costs should be decreased by an amount equal to the marginal cost imposed on third parties that results from production of the good. C. consumer of the good should pay a tax equal to the marginal benefit to third parties that results from production (or consumption) of the good. D. producers' marginal costs should be increased by an amount equal to the marginal benefit to third parties that results from production of the good.