The Criminal Records Corporation is operating at its minimum efficient scale, selling 10,000 records per month via late-night cable TV advertising. It currently buys pressed records from Hole-in-the-Middle, Inc, which has a minimum efficient scale of 100,000 records per month. Which of the following should Criminal Records do?
a. Continue to buy 10,000 records from Hole-in-the-Middle, which can make the records more cheaply.
b. Buy 100,000 records from Hole-in-the-Middle, so that company can reach its minimum efficient scale too.
c. Buy Hole-in-the-Middle and use its facilities to manufacture the 10,000 records it needs.
d. Buy Hole-in-the-Middle and stop operating as Criminal Records because Hole-in-the-Middle is the more efficient business.
e. Buy Hole-in-the-Middle and stop operating as Criminal Records because Hole-in-the-Middle is the larger business.
A
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Collective bargaining refers to
a. the process by which the government sets exemptions from the minimum wage law. b. setting the same wage for all employees to prevent conflict among workers. c. firms colluding to set the wages of employees below equilibrium. d. the process by which unions and firms agree on the terms of employment.
The similarity between markets for common resources and markets with externalities is that:
A. generally we get an oversupply at market. B. the price that competitive firms charge does not capture the true costs and benefits of consumption. C. the equilibrium quantity is too high in terms of society. D. government involvement is needed to reach an efficient outcome.
In order for a barter transaction to be successful, there must be a:
A. market for the goods. B. high demand for a certain item. C. double coincidence of wants. D. federal tax law in effect.
Which of the following displays these two characteristics: nonrivalry and nonexcludability?
A) a pure private good B) a pure public good C) a club good D) a common pool resource