According to the Strong Coase Theorem, when will the assignment of property rights have no effect on the allocation of resources?
a. Always.
b. When there are no transactions costs.
c. When there are no transactions costs and changes in the distribution of income do not have significant effects on market demand curves.
d. When liability is assigned to the party with the least-cost method of dealing with an externality problem.
c. When there are no transactions costs and changes in the distribution of income do not have significant effects on market demand curves.
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The Stogie Shop, a cigar store in the mall, sells hand-rolled cigars for $10.00 and machine-made cigars for $2.50 each. What is the opportunity cost of buying a hand-rolled cigar?
A) 4 machine-made cigars B) one-quarter of a machine-made cigar C) $10.00 D) $2.50
Government decreasing taxes is an example of:
A. contractionary monetary policy. B. contractionary fiscal policy. C. expansionary monetary policy. D. expansionary fiscal policy.