Which of the following must be present to reach a negotiated solution to an externality problem?
A) A majority of the parties involved must agree to a solution.
B) A large number of people must be involved to justify negotiating a solution.
C) The government must approve the solution.
D) The transactions costs to negotiate the solution must be relatively low.
D
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If two investments are perfectly negatively correlated:
A. diversification is not effective at reducing risk. B. bets are perfectly hedged and risks are canceled out. C. diversification reduces risk without changing the expected payoff. D. diversification reduces both risk and the expected payoff.
Supply-side economists encourage government to reduce taxes, deregulate, and increase spending on research and development because they think that these types of policies lead to greater long-run economic growth
a. True b. False Indicate whether the statement is true or false
What is the domestic price of sugar in a closed economy?
A. $2,000/ton B. $500/ton C. $3,000/ton D. $1,000/ton
The fact that at the competitive equilibrium nobody can be made better off without making someone else worse off implies that
A) the equilibrium is pareto efficient. B) the equilibrium is not pareto efficient. C) the prices need to adjust further. D) further gains from trade are possible.