Which of the following changes would increase the present value of a future payment?
a. a decrease in the size of the payment
b. a decrease in the certainty of the payment actually being received
c. an increase in the amount of time that elapses before receiving the payment
d. a decrease in the interest rate
e. none of the above
D
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Which of the following statements is TRUE?
A) APC + APS < 1 B) APC + APS + MPC + MPS = 1 C) APC + MPS = 1 D) APC + APS = 1
Which of the following is an implication of the Coase Theorem?
A) Bargaining cannot lead to an efficient allocation of resources. B) Government intervention is not always necessary to solve externality problems. C) Negotiation leads to an efficient outcome if transaction costs are high. D) Taxation leads to an efficient allocation of resources regardless of who holds the property rights.