The long-run marginal cost is the additional cost incurred by the firm when producing one more unit of output, holding the amount of capital constant.

According to the Coase theorem, under which conditions can private parties solve the problem of externalities?

a) if the cost of bargaining is small b) if the initial distribution of rights favours the person being adversely affected by the externality c) if the number of parties involved is sufficiently large d) if the number of parties involved is sufficiently small

According to the text, the main reason for people to hold money is

A) because they are irrational. B) to use it for different reasons. C) to tell other people how rich they are. D) to enjoy looking at the pictures of past leaders.