According to the Coase theorem, whatever the initial distribution of rights, the interested parties can bargain to an efficient outcome
a. True
b. False
Indicate whether the statement is true or false
True
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The crowding out of private spending by government spending will be greater the
A) less sensitive consumption, investment, and net exports are to changes in the price level. B) less sensitive consumption, investment, and net exports are to changes in interest rates. C) more sensitive consumption, investment, and net exports are to changes in interest rates. D) more sensitive consumption, investment, and net exports are to changes in the price level.
One problem with the effectiveness of Pigovian taxes is:
A. knowing whether to impose it on the consumer or producer. B. knowing what the value of the tax should be. C. identifying those who are affected by the externality. D. none of these are problems.
The demand for science fiction novels is elastic. When prices decrease from $10 to $6.50 per novel, total revenue will
a. not change. b. decrease. c. increase. d. either increase or stay the same.
One result of rent control is the desire by landlords for tenants to leave, so tenants
A. have an incentive to report all infractions, no matter how minor, to the authorities. B. have an incentive to offer more rent. C. simply leave. D. have an incentive to perform many repairs for themselves.