Keeping in mind the Coase theorem, in the figure above, if the residents of the town own the lake, the market does what?
A) overproduces 120 tons of pesticide
B) underproduces 120 tons of pesticide
C) overproduces 60 tons of pesticide
D) produces the efficient quantity of pesticide
D
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If a restaurant like Buffalo Wild Wings has higher costs than a comparable Hooters restaurant, the only way it can have higher profits is if
A) the demand for its food is higher than the demand for food at Hooters. B) it sells the quantity associated with its minimum average total cost. C) it has more locations than Hooters. D) its marginal revenue is lower than the marginal revenue of Hooters.
Nonlinear least squares estimators in general are not
A) consistent. B) normally distributed in large samples. C) efficient. D) used in econometrics.
The marginal rate of technical substitution may be defined as all of the following except:
a. the rate at which one input may be substituted for another input in the production process, while total output remains constant b. equal to the negative slope of the isoquant at any point on the isoquant c. the rate at which all combinations of inputs have equal total costs d. equal to the ratio of the marginal products of X and Y e. b and c
As inflation drives up prices, people attempt to find substitutes and adjust what they buy. The resulting substitution bias problem causes the CPI to
a. overstate the impact of higher prices on consumers. b. consistently underestimate the true inflation rate. c. omit the benefits of product quality improvements. d. have larger fluctuations than other price indexes.