________ coordinate economic activity in which there are substantial ________
A) Markets; team production efficiencies
B) Markets; transactions costs
C) Firms; economies of scale
D) Firms; principal-agent problems
C
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Does inoculation against chicken pox have both private and external benefits?
What will be an ideal response?
A monopolist's marginal revenue curve is flatter than its demand curve
a. True b. False
Explain whether a firm's decisions are optimal if economic profit is (a) positive, (b) zero, or (c) negative
The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could
a. allow individual shepherds to choose their own flock sizes. b. internalize the externality by subsidizing the production of sheep's wool. c. auction off a limited number of sheep-grazing permits. d. wait until the market corrects the problem.