Which of the following situation would make transaction costs too high to negotiate and therefore the Coase Theorem would not apply?
A. Many people are bothered by pollution in the area
B. Many firms are working together to eliminate pollution
C. Only a few people are bothered by the pollution in the area
D. One firm is the cause of the pollution
Answer: C
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James used $250,000 from his savings account that paid an annual interest of 15% to purchase a hardware store. After one year, James sold the business for $320,000 . What is his economic profit?
a. $320,000 b. $70,000 c. $282,500 d. $32,500
For a good that is a luxury, demand
a. tends to be inelastic. b. tends to be elastic. c. has unit elasticity. d. cannot be represented by a demand curve in the usual way.
The value and cost of goods are easiest to determine when the goods are
a. private goods. b. public goods. c. common resources. d. club goods.
When box office receipts are corrected for inflation, the most popular movie of all time is
a. Star Wars. b. Titanic. c. Gone With the Wind. d. The Sound of Music.