When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
a. It is appropriate to ignore that the market price includes a margin above marginal cost
b. It is OK if the product on the market includes costly features your downstream division does not use
c. Consider whether the product on the market is inexpensive because its quality is lower than you use
d. if it is similar enough, it is justification for you producing it in-house
b
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The Coase Theorem points out that for an efficient outcome to result, it is irrelevant which party receives the property rights
Indicate whether the statement is true or false
A single price monopoly that faces the demand curve P = 10 - Q and profit maximizes by reducing price from $6 to $5 must have a marginal cost of 
A. 10. B. 6. C. 1. D. 5.
Because government services are not sold in markets,
A. taxes are used to value their contribution. B. the government tries to estimate their market value and uses this to measure the government's contribution to GDP. C. they are valued at their cost of production. D. they are excluded from measurements of GDP.
Refer to the graph shown. With an effective price floor at Pf, the effect is an implicit tax on:
A. consumers shown by area B and a subsidy to suppliers of that area. B. consumers shown by area C and a subsidy to suppliers of that area. C. suppliers shown by area B and a subsidy to consumers of that area. D. suppliers shown by area C and a subsidy to consumers of that area.