The distribution of surplus gained from private parties solving an externality problem on their own, as described by the Coase theorem, is dependent on:
A. which party has more negotiating power or wealth.
B. who has more power to see to enforcement.
C. where the initial rights of the parties lie.
D. None of these statements is true.
Answer: C
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Investment in human capital is very similar to investing in physical capital. True or false? Explain your answer
What will be an ideal response?
A business cycle
a. is ups and downs in the level of economic activity over time b. is irregular and unpredictable c. has existed since recorded history d. all
If the producer of an information product engages in marginal cost pricing, it earns
A. zero economic profits. B. negative economic profits. C. positive economic profits. D. a normal profit.
All of the following are sources of comparative advantage except
A) climate and natural resources. B) relative abundance of labor and capital. C) a strong foreign currency exchange rate. D) technology.