The Coase theorem asserts that, if externalities are present and if private parties can bargain over the allocation of resources at no cost, then
a. the private market will reach an equilibrium in which resources are allocated inefficiently.
b. the private market will reach an equilibrium in which resources are allocated efficiently.
c. the private market cannot reach an equilibrium.
d. a mixture of corrective taxes and subsidies is necessary for a socially optimal equilibrium.
b
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As a result of U.S. tariffs on fishnets produced in other nations, the quantity of fishnets purchased in the United States has
A) fallen to zero. B) not been affected. C) increased. D) decreased but not to zero. E) probably changed but whether it has increased or decreased is ambiguous.
With fixed costs of $200, a firm has average total costs of $5 and average variable costs of $3 . Its output is: a. 66.67 units
b. Need more information c. 100 units. d. 40 units.
When economists look at the percentage change in quantity demanded generated by a change in income, they are looking at:
a. price elasticity of demand. b. income elasticity of demand. c. price elasticity of supply. d. cross elasticity of demand. e. cross elasticity of supply.
A favorable balance of trade occurs when the
a. value of exports equals the value of imports b. balance of payments is balanced c. current and capital accounts in the balance of payments are equal d. value of exports exceeds the value of imports e. value of exports is less than the value of imports