The Coase theorem says that, if the appropriate property right is assigned to __________, an efficient solution to an externality problem will be achieved
a. the party causing the externality
b. the victim of the externality
c. the party that can avoid the externality at the higher cost
d. the party that can avoid the externality at the lower cost
e. either one of the parties involved
E
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
If five firms of similar sizes join to form a cartel, then it is most likely that
A) they will charge a common, lower market price. B) they will collectively produce less than before. C) all five firms will earn the same profits as before. D) all five firms as a group will have falling profits, but increased output.
If firms in a competitive price-searcher market are earning economic profits, which of the following scenarios would best describe the change existing firms would face as the market adjusts to long-run equilibrium?
a. An increase in demand for each firm and lower prices. b. A decrease in demand for each firm and lower prices. c. An increase in demand for each firm and higher prices. d. A decrease in demand for each firm and higher prices.
Honus Wagner, a major league baseball player from 1897 to 1917 and one of the first five men inducted into the Baseball Hall of Fame, had his baseball card pulled from cigarette packs because he wasn't being paid for their distribution. What best describes the effect of his action on the market for his baseball card?
A. Demand shifted to the left, price fell, and supply fell. B. Supply shifted to the left, price rose, and quantity demanded fell. C. Demand shifted to the left, price fell, and quantity supplied fell. D. Supply shifted to the left, price rose, and demand shifted to the left.