The Coase theorem suggests that private solutions to an externality problem
a. are effective under all conditions.
b. will usually allocate resources efficiently if private parties can bargain without cost.
c. are only efficient when there are negative externalities.
d. may not be possible because of the distribution of property rights.
b
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The shortfall between tax receipts and government expenditure excluding interest on the national debt is called the
a) structural budget deficit b) current account deficit c) primary deficit d) tax gap e) debt ceiling
What does the deadweight loss of monopoly measure?
What will be an ideal response?
Deflation refers to a situation in which
A. the inflation rate decreases. B. there is a recession and inflation. C. prices are not changing. D. the average of all prices is falling.
Lipitor, a heart medication with few substitutes, should have an own-price elasticity of demand that is:
a. Relative elastic b. Relatively inelastic c. Perfectly inelastic d. Perfectly elastic