Suppose you must pay a non-refundable $200 down payment to order a new item. Pick the true statement below
A) The $200 represents a marginal cost before you commit to the down payment.
B) The $200 represents a sunk cost after you've committed to the down payment.
C) Both A and B are true.
D) Neither A nor B are true.
C
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The Coase Theorem suggests that negotiations to eliminate an externality allow the resource to
A. stop causing the externality altogether. B. move to the person who values it the most. C. move to the person who needs it the most. D. continue to benefit everyone.
Which of the following statements is TRUE?
A) If average product equals marginal product, average product decreases. B) If marginal product equals average product, average product is a maximum. C) If marginal product equals average product, marginal product is a maximum. D) If marginal product exceeds average product, marginal product increases.
Everything else equal, the AC curve will shift downward if
A. input prices rise. B. input MPPs rise. C. output rises. D. output falls.
Several writers have helped to popularize the notion that stock prices follow no discernible pattern. What is meant by a random walk, and how can you explain why people continue to invest in stocks if the random walk theory is correct?
What will be an ideal response?