Answer the following statement(s) true (T) or false (F)
1. In the absence of transactions costs, changes in property rights have no effect on economic efficiency.
2. In the absence of transactions costs, changes in property rights have no effect on the distribution of income.
3. Changes in property rights will not affect the allocation of resources as long as transactions costs are zero and the subsequent effects on market demand are negligible.
4. The weak Coase theorem is true when reallocation of property rights have negligible income effects .
5. According to the Coase Theorem, in the absence of transactions costs, recipients of an external benefit can be expected to offer a bribe in exchange for greater production.
1. True
2. False
3. True
4. False
5. True
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Refer to Figure 4.1. Alvin's available strategies include
A) top and bottom. B) up and down. C) left and right. D) all of the above
In monopolistic competition, a firm must determine what price to set for its good because
A) the demand for its good is not perfectly elastic. B) the demand for its good is perfectly elastic. C) there are many buyers. D) there are many sellers.
Monopolistic competitors are protected by barriers to entry
a. True b. False
Which of the following is a characteristic of capitalism?
a. Government ownership of all capital. b. Government decision-making is preferred to decentralized decision-making. c. Market determination of prices and quantity. d. Equality of income.