If two firms expect to be in the market together for a long time, the benefit of underpricing will be large relative to the cost.
Answer the following statement true (T) or false (F)
False
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Inflation makes money an imperfect store of value
Indicate whether the statement is true or false
As interest rates rise, banks seek to decrease their loans and, thereby, shrink the money supply
a. True b. False Indicate whether the statement is true or false
If you get a flu shot and by taking it, you help prevent the spread of the disease, then the flu shot is:
A. a private good with external benefits. B. a private good with external costs. C. a public good with external benefits. D. a public good with external costs.
Answer the following statement(s) true (T) or false (F)
1. In a deposit-refund system, the deposit makes the polluter internalize the externality by absorbing the cost of any damage it might generate in advance. 2. To effectively internalize the externality, the deposit component of a deposit-refund system must raise the MPC of illegal waste disposal by the MECmeasured at the competitive output level. 3. Suppose that Firm 1 and Firm 2 face marginal abatement costs of MAC1 = 2.5A1 and MAC2 = 1.5A2, respectively, and that tradeable permits for pollution are issued such that a total of 20 units must be abated. If firm 1 abates 7.5 units, and firm 2 abates 12.5 units, then both firms have an incentive to trade. 4. If Firm X is abating 9 units with an MACX = 0.6AX, and Firm Y is abating 11 units with an MACY = 0.9AY, then Firm Y should do less of the abating and Firm X should do more in order to lower the overall costs of abatement.