The derived demand for borrowed funds has the characteristic negative slope of any demand curve.
Answer the following statement true (T) or false (F)
True
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To be accepted as money, an item must perform all of the following functions EXCEPT
A) be a medium of exchange. B) serve as a store of value. C) be easily reproduced. D) serve as a standard of deferred payment.
The figure above shows a perfectly competitive firm. The firm is operating; that is, it has not shut down. The firm produces
A) 20 units of output and makes zero economic profit. B) 20 units of output and incurs an economic loss. C) 10 units of output and makes zero economic profit. D) 10 units of output and incurs an economic loss.
Suppose a plaintiff hires a lawyer to represent her in a court case. The lawyer will be paid by the hour. Under this contract,
A) production efficiency is not achieved. B) the client bears all of the risk. C) the lawyer has an incentive to lie about his hours worked. D) All of the above.
The expected damage to innocent third parties per unit of the good produced is shown as the "external cost" in Figure 27.1. An unregulated competitive market for the product produces a quantity of Q* units, which sell for a price of P* per unit. If the expected cost to producers of this product due to unreasonable jury awards in frivolous lawsuits were greater than the external cost per unit produced, the quantity of the good produced by this competitive industry would be 
A. less than the socially optimal quantity. B. greater than the socially optimal quantity but less than Q* units. C. equal to the socially optimal quantity. D. greater than Q* units.