Helping the poor is not necessarily the same thing as promoting greater equality. a. True b. False ANSWER a
Date: September 9th, 2020
Coase made famous a court case between a doctor and a confectioner. Suppose that exact case happened again and transactions costs were absent. When would we be sure that resources were inefficiently allocated? a. If the confectioner wins the property right to make his confections. b. If the doctor wins the right to prevent the […]
Date: September 9th, 2020
The justification for government action based on the argument that everyone agrees to be coerced if everyone else is forced as well is not compatible with the criterion of Pareto superiority. a. True b. False ANSWER a
Date: September 9th, 2020
What is the transitional gains trap? In New York, in order to be legal a cab driver must have a medallion (i.e., a license) to operate. With respect to New York cab drivers who, if anyone, received transitional gains? What if the medallion program were ended tomorrow. Who would be harmed? ANSWER The transitional […]
Date: September 9th, 2020
Describe the holdout problem with emphasis on how it might lead to resource being allocated inefficiently. Give three private ways to possibly overcome the holdout problem. What will be an ideal response? ANSWER The holdout problem arises when unanimous agreement is required for a collective action. The holdout problem can prevent Pareto superior moves […]
Date: September 9th, 2020
The Coase theorem applies to cases where _____. a. transactions costs are high b. transactions costs are obvious c. transactions costs are zero d. transactions costs are difficult to figure out ANSWER c
Date: September 9th, 2020
The Coase Theorem implies that _____. a. absent transactions costs, resources will be efficiently allocated b. absent transactions costs, resources will be inefficiently allocated c. with significant transactions costs, resources will be efficiently allocated d. with significant transactions costs, resources will be inefficiently allocated ANSWER a
Date: September 9th, 2020
The figure above shows a graph of the market for pizzas in a large town. What characterizes the equilibrium in this market? A) There is excess supply at the equilibrium price of $7. B) The government has selected the appropriate price for pizzas. C) The quantity supplied equals the quantity demanded. D) Supply equals demand. […]
Date: September 9th, 2020
“Captured” regulators end up doing exactly what the regulated industry wants. a. True b. False ANSWER b
Date: September 9th, 2020
The above figure shows a graph of a market for pizzas in a large town. At a price of $10, the market A) is not in equilibrium. B) has excess supply. C) does not have excess demand. D) All of the above. ANSWER D
Date: September 9th, 2020
