The difference between consumer surplus and producer surplus in a market is equal to the deadweight loss
Indicate whether the statement is true or false
FALSE
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The Coase theorem asserts that, if externalities are present and if private parties can bargain over the allocation of resources at no cost, then
a. the private market will reach an equilibrium in which resources are allocated inefficiently. b. the private market will reach an equilibrium in which resources are allocated efficiently. c. the private market cannot reach an equilibrium. d. a mixture of corrective taxes and subsidies is necessary for a socially optimal equilibrium.
If every country uses tariffs, everyone is likely to lose.
Answer the following statement true (T) or false (F)
In the short run, the profit-maximizing monopolistically competitive firm will produce the rate of output at which
A. P = ATC. B. P = MC. C. MR = ATC. D. MR = MC.
Suppose an astronomer discovers gold on the moon. Would this gold add to the world reserves?
A) Yes, we know it exists and we could recover it. B) No, we know it exists but we can't extract the gold. C) No, there are no established property rights over the moon so they cannot add to world reserves. D) Yes, but only if the astronomer is the resident of a developed country with well-established property rights.