The factor that leads to underpricing and overuse of an economic resource is
A. human greed and selfishness.
B. capital markets.
C. the lack of an enforceable property right.
D. the lack of understanding of pollution and its effects.
Answer: C
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When people reduce their rate of time preference
A) more credit is made available in the banking system. B) less credit is made available in the banking system. C) the demand for credit shifts right. D) the supply of credit shifts left.
Assume that four oligopolists begin with a common price of p = $20. One of the firms lowers its price to $17. What are the other three firms likely to do, based on the theory of the kinked demand curve?
A. Lose $3 per unit B. Make $3 more per unit than the firm that lowered price C. Raise their prices above $20 to make up for the lost volume D. Lower their prices to $17 so that they won't lose business to their competitor
The slope of the credit demand curve from the text book implies that the:
A) higher the rate of taxation, the lower the quantity of credit demanded. B) higher the real rate of interest, the higher the quantity of credit demanded. C) higher the real rate of interest, the lower the quantity of credit demanded. D) higher the rate of taxation, the higher the quantity of credit demanded.
Exhibit 7-16 Long-run average cost curves
In Exhibit 7-16, which firm's long-run average cost curve experiences constant returns to scale between 2 and 5 units?
A. Firm A. B. Firm B. C. Firm C. D. Firms A and C.