A firm can reduce its expected legal costs by negotiating an advance pricing agreement (APA) with the IRS. However, filing an APA can expose the firm to considerable risk by giving the government access to its sensitive cost-related information. This is an example of the ________ that arise due to regulation.:
A. legal costs
B. information asymmetries
C. positive externalities
D. opportunity costs
Answer: D
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The indifference curve in the above figure
A) could illustrate a person's preferences for identical computer disks made by two different companies. B) could illustrate a person's preferences for right-handed and left-handed gloves. C) has a marginal rate of substitution that at first decreases and then increases. D) None of the above statements is correct.
In the short run, a firm may have accounting losses and remain in operation.
Answer the following statement true (T) or false (F)
Markets fail to maximize total surplus when:
A. individual choices impose costs or benefits on others. B. society's choices impose costs or benefits on other societies. C. when all costs and benefits are received by participants in transactions. D. producer surplus is not exactly equal to consumer surplus.
If the inflation rate is rising, which one of the following would the Fed need to do to reduce the inflation rate?
A. Reduce reserve requirements B. Reduce margin requirements C. Encourage more discount borrowing D. Increase the federal funds rate