When producing a good creates pollution, an external cost, and the government imposes a tax equal to the marginal external cost, then
A) the amount of output moves farther away from the efficient amount.
B) transaction costs will be high.
C) the efficient amount of the good will be produced.
D) property rights must have already been established.
C
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In repeated games, all of the following allow a firm to escape an inefficient "prisoners dilemma" equilibrium except
a. Be nice, don't strike first b. Respond immediately to non-cooperation c. Punish competitors as much as you can d. Make sure your competitors can easily interpret your actions
Every economy must ration goods in some way because of
a. overpopulation. b. poorly-performing markets. c. the income gap between rich and poor. d. scarcity.
Refer to the figure below. Suppose MC1 is the marginal cost of information and MB1 is the marginal benefit of information. Should a rational consumer pay $6 to get a 5th unit of information?
A. No, because at this price, the marginal cost of the 5th unit exceeds its marginal benefit. B. Yes, because at this price, the marginal benefit of the 5th unit equals its marginal cost. C. No, because at this price the marginal benefit of the 5th unit exceeds its marginal cost. D. Yes, because at this price, the marginal benefit of the 5th unit exceeds its marginal cost.
The purchase of a new automobile is included in
A) consumption expenditures on services. B) consumption expenditures on nondurable goods. C) consumption expenditures on durable goods. D) investment expenditures.