Suppose both John and Bill can do two tasks. If John can do each of the two tasks faster than Bill, then there is nothing that Bill should do; John should do everything
Indicate whether the statement is true or false
false
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A metal-stamping factory moves next to a day care center. Noise from the factory makes it impossible for the kids to nap. It would cost the factory $5 million to move; it would cost $1 million for the day care center to move. Sound insulation for the factory costs $1 million; insulation for the day care center costs $200,000 . The court initially determines that the day care center has the
property right and orders the factory to purchase insulation for the day care. But on appeal the factory is awarded the property right. How would the optimal solution to this problem change after the appeals court decision? a. The insulation would still be bought, but it would be bought by the day care center, a result consistent with the Coase theorem. b. Insulation for the factory would be bought instead of insulation for the day care center, a result consistent with the Coase theorem. c. Insulation for the day care center would still be bought, but it would be bought by the factory, a result consistent with the Coase theorem. d. Insulation for the factory would be bought instead of insulation for the day care center, a result inconsistent with the Coase theorem. e. The day care center would move instead of buying insulation, a result consistent with the Coase theorem.
If the aggregate supply curve is upward-sloping, then the short-run effect of an increase in the money supply is an increase in both real output and the price level
Indicate whether the statement is true or false
There are two existing firms in the market for computer chips. Firm A knows how to reduce the production costs for the chip and is considering whether to adopt the innovation or not. Innovation incurs a fixed setup cost of C, while increasing the revenue. However, once the new technology is adopted, another firm, B, can adopt it with a smaller setup cost of C/3. If A innovates and B does not, A earns $30 in revenue while B earns $10. If A innovates and B does likewise, both firms earn $20 in revenue. If neither firm innovates, both earn $10. If C = 12, which is the perfect equilibrium of the game?
A. Neither firm innovates. B. A innovates, B does not. C. A innovates, B innovates. D. None of the answers is correct.
Suppose that the percentage change in demand is 20%, the price elasticity of demand is 3, and the percentage change in the equilibrium price is 4%. What is the price elasticity of supply?
A. 0 B. 2 C. 4 D. 5