Which of the following statements is correct?
a. The establishment of property rights sometimes gives rise to market failure.
b. The absence of property rights sometimes gives rise to market failure.
c. In the context of public goods, the Coase theorem implies that total surplus in some markets can be improved by the elimination of property rights.
d. Government regulation of private behavior, in response to market failure, can never improve social well-being.
b
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Suppose that choice sets are convex but we tastes may or may not be convex. (Assume all our other usual assumptions about tastes hold.) The first order conditions of the constrained utility maximization problem are then
A. necessary conditions for a true optimum. B. sufficient conditions for a true optimum. C. necessary and sufficient conditions for a true optimum. D. none of the above.
Refer to Exhibit 6-3. Prices changed by ___________ percent between year 1 and year 2.
a. -1.6 b. -1.7 c. 1.6 d. -2.3 e. 2.3
A market includes
a. buyers only. b. sellers only. c. both buyers and sellers. d. the place where transactions occur but not the people involved.
Entry and exit drive each firm in a monopolistically competitive market to a point of tangency between its
a. marginal revenue curve and its total cost curve. b. marginal revenue curve and its average total cost curve. c. demand curve and its total cost curve. d. demand curve and its average total cost curve.