Which of the following is true of both a tradable permit system and the assignment of property rights?
a. Both methods result in socially optimal consumption.
b. Both methods result in a deadweight loss to the society
c. Both methods ensure that the Coase theorem does not increase the welfare of an economy.
d. Both methods push the economy into a liquidity trap.
a
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The Bay Area in California is home to the Oakland Athletics and the San Francisco Giants. New York City is home to the Mets and Yankees. Most other cities only have one baseball team, if any at all. What is the best explanation for this phenomenon?
a. Most baseball fans, who are the demanders for baseball games, tend to live in New York and San Francisco b. Baseball team owners live in large cities, such as New York and San Francisco. c. In most baseball cities—excluding New York, San Francisco, etc.—baseball teams are natural monopolies. d. Only these four teams face downward-sloping demand curves. e. Only these four teams have declining average total costs.
Credit risk is:
A. the risk of a borrower defaulting on a loan. B. lower, the longer the length of the loan. C. lower, the larger the amount of the loan. D. the risk of not being able to get a loan when your credit is good.