Which of the following is NOT an example of a transaction cost?
A) the enjoyment of owning the good
B) the opportunity cost of time spent looking for stores that sold the good desired
C) the cost of returning a defective product
D) time spent bargaining over the price of a good
A
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Assume the demand schedule for cookies is downward sloping. If the price of cookies falls from $2.50 to $2.25 per dozen: a. the demand for cookies will fall
b. the demand for cookies will rise. c. a larger quantity of cookies will be demanded. d. a smaller quantity of cookies will be demanded.
Answer the following statement(s) true (T) or false (F)
1. Use of a common property is nonrivalrous. 2. A nonexcludable good, once produced, can be made available to others at no additional cost. 3. Private markets tend to undersupply nonrivalrous goods because of free riding. 4. Once it has been produced, the efficient price for a nonrivalrous good is zero. 5. An HBO broadcast over cable television is rival in consumption but non-excludable.