When a new firm considers entering a market, it takes into account only the profit it would make. What are the two external effects that occur in the market that the firm does not consider?
product-variety externality
business-stealing externality
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Property rights are social facts because
A) they are created and enforced by government. B) they are widely distributed throughout society. C) they depend upon other people's acceptance of corresponding obligations. D) they must be held in common to be effective.
When the production of a good has an external cost, the
A) marginal social cost curve lies below the marginal private cost curve. B) marginal social benefit curve lies above the marginal private benefit curve. C) equilibrium quantity in an unregulated, competitive market has a marginal social cost greater than the marginal social benefit. D) equilibrium quantity in an unregulated, competitive market has a marginal social cost less than the marginal social benefit.
Since real GDP is adjusted for inflation and nominal GDP is not, nominal GDP must always be higher than real GDP. Do you agree or disagree? Why?
What will be an ideal response?
A firm wishes to shut down an office and fire 100 employees. The company will save $3000 per month per employee. It is estimated that each employee contributes $4,100 to the company. The firm rents office space for this group of employees at $1500 . What should the company do?
a. Fire the employees and save $1500 on rent b. Not fire the employees keeping them generates a profit of $1100 per employee c. Not fire the employees since keeping them generates a profit of $1085 per employee d. None of the above