Answer the following statement(s) true (T) or false (F)
1. The underlying assumptions of the Coase Theorem are that transactions are costless and that damages are accessible and can be measured.
2. The study conducted by Greenpeace China of the Pearl River Delta (PRD) region indicates that progress is being made to improve water quality.
3. If property rights are held by the producer of an externality-generating good, then bargaining will continue as long as MEC>?>M?, where ? represents the payment offered to the producer not to pollute.
4. If recreational users of a natural resource hold the property rights to that resource, their bargaining stance with the producer of an externality-generating good who wants to use that resource is that they will accept a payment ? as long as ?< (MSC – MSB).
5. If property rights for resources are shared, those resources are called common property resources.
1. True
2. False
3. True
4. False
5. True
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A person starting to drive more recklessly after signing a contract with an automobile insurance company is an example of
A) adverse selection. B) moral hazard. C) signaling. D) screening.
Refer to the above figure. Which of the graphs are consistent with the age-earnings profile?
A) Panel A B) Panel B C) Panel C D) Panel D
What role does ideology play in the debate on stabilization?
a. A large role, because there are conservative and liberal economists. b. A primary role, because there are no economic aspects to the debate at all. c. A minor role, because economists are fairly uniform in their political views. d. No role at all, because this is purely a technical question.
All else constant, an increase in the supply of money will lead to _______
A) an increase in the equilibrium quantity of money and an increase in the equilibrium price of bonds. B) an increase in the equilibrium quantity of money and a decrease in the equilibrium price of bonds. C) a decrease in the equilibrium quantity of money and an increase in the equilibrium price of bonds. D) a decrease in the equilibrium quantity of money and a decrease in the equilibrium price of bonds.