Transfer prices
a. are an accounting device to allocate the costs and revenues of intermediate products across divisions
b. increase the 'profits' of the profit center producing the intermediate product when they rise
c. decrease the 'profits' of the profit center using the intermediate product when they rise
d. all of the above
d
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The Golden Rule capital—labor ratio is the level of the capital—labor ratio that, in the steady state,
A) maximizes output per worker. B) maximizes investment per worker. C) maximizes consumption per worker. D) maximizes capital per worker.
Unpriced by-products of production or consumption that impose costs on other consumers or firms are known as
a. negative externalities b. effluent fees c. pollution rights d. positive externalities e. moral hazards
Figure 15-2
The firm illustrated in Figure 15-2 is producing
A. less than it would if the external costs were internalized. B. more than it would if external costs were internalized. C. a beneficial externality. D. at the socially optimal point.
Political business cycles result _____
Fill in the blank(s) with the appropriate word(s).