If absolute property rights to an endangered resource are granted to someone who inefficiently manages the resource, explain what the Coase theorem predicts will happen to that resource
What will be an ideal response?
The inefficient management of the resource creates an opportunity for someone who can manage and use it better to purchase the resource. According to the Coase theorem, the property rights to a resource will be acquired by the party that values it most.
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If the cross-price elasticity of demand between two goods is -1.2, then the two goods are:
A. substitutes. B. complements. C. inferior. D. elastically demanded.
In contrast to the need for legal enforcement under a system of direct controls, a taxes approach
A. is subject to greater uncertainty of payment of fees. B. makes taxes automatic and certain. C. speeds the prosecution and conviction process. D. does not actually reduce pollution, merely the cost of monitoring it.
When a perfect competitive industry is in long-run equilibrium,
A. each firm earns a normal return. B. market price is equal to minimum long-run average cost. C. a firms have no incentive to enter or exit the industry. D. both a and c E. all of the above
Refer to the consumption schedule above. At income level 3, the amount of consumption is represented by the line segment:
A. FG
B. FH
C. FD
D. GH