Which of the following is not a necessary condition for the Coase theorem?
a. Property rights are clearly defined.
b. The costs of bargaining are sufficiently low.
c. The government intervenes to internalize the externality.
d. There are only a few parties involved.
c
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The main sources of economies of scale are
A) increasing marginal cost and decreasing marginal product. B) specialization of resources such as labor and capital. C) caused by the difficulty of coordinating and controlling large enterprises. D) decreasing marginal cost and increasing marginal product. E) an increase in a firm's bargaining power to lower the wage rate and the cost of capital as the firm's output increases.
Chloe's Café sells gourmet cinnamon rolls. In the long run, the café incurs a total cost of $500 to produce 1,000 cinnamon rolls. If Chloe's Café exhibits economies of scale between 1,000 and 2,000 cinnamon rolls, the long-run average total cost for 1,500 cinnamon rolls is a. higher than $0.50. b. lower than $0.50
c. equal to $0.50. d. higher than $500.
Each day Sue works 8 hours and produces 7 units of goods and services. Mary works 10 hours each day and produces 10 units of goods and services. It follows that
a. Sue's productivity is higher than Mary's. b. Mary's productivity is higher than Sue's. c. Sue's income per hour will be higher than Mary's. d. Sue's income per day will be higher than Mary's.
Suppose Frank is considering purchasing an asset that will have a future value of $1000 in 7 years. The interest rate is 6% and the price of the asset is $600. Should Frank buy the asset? Why or why not?
What will be an ideal response?