The Coase theorem will hold only if:
A. the transactions costs are clearly identified and assigned.
B. the contracts are enforceable.
C. government will provide free mediation.
D. None of these statements is true.
B. the contracts are enforceable.
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From the data in the above table, when the economy is in short-run equilibrium, if aggregate demand does not change, then as time passes the
A) short-run aggregate supply curve shifts rightward. B) short-run aggregate supply curve shifts leftward. C) long-run aggregate supply curve shifts rightward. D) long-run aggregate supply curve shifts leftward.
After a hurricane in Florida knocked out the regional water supply for several days, the demand for bottled water increased sharply. In a market economy, how will this increase in demand affect the equilibrium price and quantity of bottled water?
A. Price will increase, and quantity will decrease. B. Price will decrease, and quantity will decrease. C. Price will decrease, and quantity will increase. D. Price will increase, and quantity will increase.
The costs associated with reaching and enforcing agreements are called
A. common property costs. B. audit costs. C. transaction costs. D. private property costs.
The WWQX Co sells shirts. Shirts with the company label on the tag are perceived to be of higher quality than shirts with the store's label. Yet, shirts are of identical quality regardless of the label. The demand for perceived high-quality shirts is ph = 80 - qh. The demand for perceived low-quality shirts is pl = 19 + ph - ql. The firm can produce shirts at TC = 2qh + 2ql. What prices are
charged for the low-quality and for the high-quality shirts? A) pl = 31; ph = 41 B) pl = 51; ph = 41 C) pl = 17; ph = 45 D) pl = 35; ph = 28