The Coase theorem states that
A. transaction costs consist of marginal private costs and marginal social costs and are higher when exchange is subject to increasing marginal costs.
B. transaction costs are the difference between marginal social costs and marginal private costs and are higher when exchange is subject to decreasing marginal costs.
C. when transaction costs are significant, the resource-allocative outcome will be the same regardless of who is assigned the property rights.
D. when transaction costs are insignificant, the resource-allocative outcome will be the same regardless of who is assigned the property rights.
E. b and c
Answer: D
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The processes a firm uses to turn inputs into outputs of goods and services is called
A) marginal analysis. B) positive economic analysis. C) technology. D) technological change.
Transfer payments, like Social Security, are known as entitlements since ________
A) they are locked up by earlier legislation B) the individuals who receive these payments are poor and deserve our support C) the individuals who receive these payments made payments to the federal government in excess of the monies they draw from the system D) these monies tend to rise in an economic downturn
Suppose that there are five bottles of lemonade, each of which gives a consumer the same level of utility. According to the law of diminishing marginal utility, how can the consumer receive the highest utility?
a. Consume all five bottles in the next hour b. Consume all five bottles today c. Consume all five bottles in one day next week d. Consume two bottles today and three tomorrow e. Consume one bottle each day for the next five days
A monopolist’s cost curves will
A. be identical to those of a competitive firm. B. be higher than a competitive firm’s cost curves. C. be peculiar to the individual producer since there is only one. D. drop more steeply as output increases.