Aluminum Aces dumps wastewater into a creek they have owned for decades. The new neighbor, Ms. Franklin, has tried to grow bamboo along the creek where it enters her property, but the wastewater kills about $1,000 worth of her bamboo each year. She offers Aluminum Aces $600 per year to add a new filter, which costs $400, to their system so wastewater will no longer kill her bamboo. Which of the following is true of this situation and necessary for it to fit the Coase theorem?
a. Neither party is worse off than before.
b. Property rights are not defined.
c. A positive externality is internalized.
d. Transaction costs are high.
a. Neither party is worse off than before.
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Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. Most chocolate companies use already processed chocolate to craft their sweets
But Rogue buys raw cocoa beans, and roasts and grinds them until they're in a liquid state and then runs the chocolate through a big squat machine with rollers. Which statement is TRUE for Rogue? A) Raw cocoa beans are a variable factor of production and the machine is a fixed factor of production. B) Both processed chocolate and raw cocoa beans are variable factors of production. C) Processed chocolate is a variable factor of production and the machine is a fixed factor of production. D) Processed chocolate and raw cocoa beans are variable factors of production and the machine is a fixed factor of production.
How did maintaining the gold standard deepen the severity of the Great Depression?
What will be an ideal response?
Food retailers usually do not compete on which of the following factors?
a. Price b. Variety c. Location d. Packaging
Bobby makes a New Year's resolution to lose weight. On January 3rd, he decides to go to Ben amp; Jerry's for ice cream instead of going to the gym. Using the concept of revealed preference, economists would most likely conclude that Bobby:
A. has changed his preferences. B. is not a rational individual. C. has no choice over the actions he takes. D. actually gains more utility from ice cream than working out.