The idea that resource allocation can remain efficient, even in the presence of externalities, as long as property rights are clearly assigned and transaction costs are low is referred to as the:
A. law of demand.
B. law of diminishing returns.
C. Coase Theorem.
D. Black/Schloes formula.
Answer: C
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GDP measured using current prices is called ________.
A. real GDP B. deflated GDP C. nominal GDP D. constant GDP
A study of the effects of the minimum wage on employment of low-skilled workers estimated the price elasticity of demand for low-skilled workers is -0.75
Suppose that the government is considering raising the minimum wage from $7.25 per hour to $7.75 per hour. Based on this information, calculate the percentage change in the employment of low skilled workers. Use the midpoint formula.
Refer to Figure 4.3. All else equal, an increase in the government's budget deficit accompanied by a decrease in corporate taxes would cause which of the following shifts?
A) S1 to S2 and D1 to D2 B) S2 to S1 and D1 to D2 C) S1 to S2 and D2 to D1 D) S2 to S1 and D2 to D1
Increases in productivity are not responsible for increased standards of living in the United States
a. True b. False Indicate whether the statement is true or false