Coase theorem - Study guides, Class notes & Summaries

The nominal interest rate is: - not adjusted by inflation. There can be an efficient amount of a public good provided in the private market if producers can - Overcome the non-excludability of the good Public goods are goods that are: - Non-rival in consumption, and non-excludable Cost-benefit analysis is a way to: - rank projects according to their marginal net benefits. Suppose the government provides some amount of a public good, but it results in a reduction of privat...

In order to be Economically Efficient...(2) - ANSWER-1. All actions where the Benefits > Costs should be undertaken 2. No actions where the Costs > Benefits should be undertaken What are the 2 Roles for the Government when it comes to Economic Efficiency? - ANSWER-1. Protect Individuals and Property Rights 2. Provide Goods that cannot be easily provided by the Market (Overcome Market Failure) Market Failure includes...(4) - ANSWER-1. Lack of Competition 2. Externalities 3. Un...

world price the price of a good that prevails in the world market for that good tariff a tax on goods produced abroad and sold domestically internalizing the externality altering incentives so that people take account of the external effects of their actions externality the uncompensated impact of one person's actions on the well-being of a bystander Coase theorem the proposition that if private parties can bargain without cost over the allocation of resources, ...

CFA Level 2 Exam 115 Questions with Answers 2023 FCFF (using EBITDA) - CORRECT ANSWER FCFF = EBIDTA(1-T) + DEP(T) - Finv - Winv Converting FIFO to LIFO COGS - CORRECT ANSWER FIFO COGS = LIFO COGS - (End LIFO Reserve - Beg LIFO reserve) Engle- Granger Test - CORRECT ANSWER Test whether 2 variables are cointegrated. Regress 1 data series against the other and check residuals for unit root. Steady State of Growth Formula - CORRECT ANSWER growth = Growth Rate TFP/1-(Labor cost in total...

UNT ECON 1100 Exam 2 Review Questions and Answers Price controls such as price ceilings and price floors: ANSWER cause surpluses and shortages to persist since price cannot adjust to the market equilibrium price. Ceteris paribus, an effective (binding) price floor for a good leads to: ANSWER surpluses of the good. The efficient level of an activity is at the point where: ANSWER marginal benefit is equal to marginal cost. Marginal cost is: ANSWER the cost of producing one more unit of...

The lease on Allison's apartment will expire next month and she wants to move closer to campus. There are two apartments that she likes. Both are close to campus and in her price range. The first one is next door to a garage where local bands often practice late at night. The second one is next door to a donut shop that opens at 5 a.m. If she likes to stay up late and loves listening to all kinds of music, she will view the bands practicing as a(n): If she is a morning person and love...

What are Hayeks views on planning and decision making? he believes in decentralized knowledge HAYEK: what is decentralized knowledge? spreading knowledge amongst people is Hayek against centralization? yes HAYEK: how does the price system coordinate resources? price signals are used to make decisions and send information to other groups because prices are lower or higher what are price signals? signals wrapped up in incentives; prices can constantly adapt and upd...

What are Hayeks views on planning and decision making? - he believes in decentralized knowledge HAYEK: what is decentralized knowledge? - spreading knowledge amongst people is Hayek against centralization? - yes HAYEK: how does the price system coordinate resources? - price signals are used to make decisions and send information to other groups because prices are lower or higher what are price signals? - signals wrapped up in incentives; prices can constantly adapt and update in resp...

What are Hayeks views on planning and decision making? - he believes in decentralized knowledge HAYEK: what is decentralized knowledge? - spreading knowledge amongst people is Hayek against centralization? - yes HAYEK: how does the price system coordinate resources? - price signals are used to make decisions and send information to other groups because prices are lower or higher what are price signals? - signals wrapped up in incentives; prices can constantly adapt and update in resp...

ECON1002: Microeconomics Exam2 1. If many people in a community install fire hydrants, the whole community benefits including those that did not install it. Therefore, not enough people may decide to install the fire hydrant. This is one illustration of: A. The market allocating resources efficiently B. Monopoly power due to lack of competition C. Supply-side market failure D. Demand-side market failure 2. When a private firm provides fireworks, it could not produce the efficient amount of it be...