Employing a lawyer to draft and enforce a private contract between parties wishing to solve an externality problem is an example of
a. an opportunity cost.
b. an implicit cost.
c. a sunk cost.
d. a transaction cost.
d
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Refer to the above figure. For a normal good, the rightward shift of the curve could have been caused by
A) a technological improvement. B) an increase in the cost of inputs. C) an increase in income. D) a decrease in income.
In a PPF graph of goods X and Y, points that lie beyond (to the right of) the PPF represent combinations of the two goods that are currently unattainable
Indicate whether the statement is true or false
In a corporation, the interests of the owners, who seek to maximize profits, may differ from the interests of the managers, who seek prestige and high income. This divergence would be considered:
A. a limited liability problem. B. a free-rider problem. C. a rationing problem. D. a principal-agent problem.
An income tax is progressive if
A. most of the tax revenue is used to benefit lower-income households. B. higher-income households pay a larger share of their income in taxes than lower-income households. C. most of the tax revenue is used to benefit higher-income households. D. lower-income households pay a larger share of their income in taxes than higher-income households.