The Coase theorem applies when ______.
a. externalities are increased
b. externalities are internalized
c. internal costs are externalized
d. internal costs are eliminated
b. externalities are internalized
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Which of the following is an industry without significant barriers to entry?
a. Electricity generation b. Natural gas distribution c. Cable television provision d. Corn farming e. Postal services
A macroeconomist would concentrate on which of the following issues?
A. The price of pizzas B. The profits of the IBM Corporation C. The unemployment rate in Germany D. The market for hotdogs
A negative externality is a situation in which
A) there is a spillover of benefits. B) a cost associated with an economic activity is borne by a third party. C) a firm is paying in excess of the total costs of producing a good. D) none of the above.
College graduates earn much more than grade school dropouts mainly because
A. the college graduate is older. B. the college graduate has learned more. C. the college graduate is probably smarter, richer, more motivated, has better connections, and comes from a more supportive learning environment. D. the college graduate is more likely to have grown up in a large city, and to be more cosmopolitan.