Why are property rights important in economic development?
What will be an ideal response?
The absence of well-defined property rights makes it difficult for trade to take place and for the development of technological innovation. If competitors can easily take the intellectual property of others without legal sanctions it may serve as a disincentive to produce these innovations in the first place.
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The market demand for MP3 players is p = 50 - 0.5Q, and the marginal cost for an MP3 player is $10. If Nick receives 60% of the total profit, then
A) Nick will produce 50 MP3 players. B) Nick receives $500 as profit. C) total profit is $800. D) the efficiency in production is not achieved.
Automobile companies typically make some of the parts for cars (for example, the body and engine) but not others (for example, the tires). Under what conditions would you expect an automobile manufacturer to be most likely to buy inputs from other companies?
a. when the specifications (size, style, etc.) of the inputs change frequently b. when the inputs being produced have little value c. when market prices have not been established for the inputs d. when it is relatively easy to measure the quantity and quality of the input
When the United States imposed a 25% tariff on imported pickup trucks, the price of Japanese pickup trucks in the United States:
a. rose by 25%. b. rose by less than 25%. c. rose by more than 25%. d. fell by less than 25%.
The following graph shows the production possibilities curve for the economy with only two members, Silvia and Art. Silvia can produce either 50 pounds of beef or 2 computers per week, and Art can produce 100 pounds of beef or 1 computer per week. Both of them work 40 weeks per year.
Silvia's opportunity cost of producing one computer is ________ pounds of beef.
A. 1/25 B. 1/50 C. 25 D. 50