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3 years ago

A coase solution to a problem of externality ensures that a socially efficient outcome is to

1 answer:

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A coase solution to a problem of externality ensures that a socially efficient outcome is to maximize the joint welfare, irrespective of the right of ownership.

Explanation:

In law and in economics the Coase theorem explains the economic efficiencies in the existence of externalities. The economic efficiency of economic allocation or outcome. In practice, barriers to negotiation or poorly defined rights of property can prevent coasean negotiations.

The private external solutions include, for the benefit of the relevant parties, moral codes, charities and business fusions and contracts. In the theorem, two parties can bargain and obtain an optimal outcome in the presence of an externality when transaction cost is low.

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Late-night road construction begins on a new bridge. As a consequence, traffic is rerouted past your house while the constructio

adoni [48]

Answer:

B. negative externality

Explanation:

As it is late-night the sound of the traffict will bother to sleep for me and the entire area. This cost is not considered when performing the financial decistion but it is there as the utiliy from the conumer in that area decrease as a result of the labor in the highway to steer traffic into here.

As a result of these externality the social optimall decreases for the time the road construction end.

5 0

3 years ago

Among competing firms, a firm’s actions are considered strategic substitutes when: Group of answer choices an increase in one fi

andre [41]

Answer:

firms compete on multiple dimensions like price, quantity, and product attributes.

Explanation:

Price, product and place are common factors used by firms to establish a competitive advantage over other strategic groups within the same industry. These factors enable a firm to establish a long term projection plan for their products and services in a competitive environment.

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3 years ago

SAP Inc. received a $1.5 million grant under its Small Business Innovation program. SAP invested the grant money and developed a

MrRa [10]

Answer:

B) $5.64 million

Explanation:

SAP inc can receive $500,000/ shipyard and 4 shipyards a year yields gross cash flows of 500*4 = $2,000,000. Half of these are costs that give us a Net cash flow of $1,000,000/ year.

Since there is no maturity of the project we calculate present value of cash flow with the following formula

PV of cash flow = 1,000,000/0.14 = $7.14 million rounded off

NPV = 7.14-1.5 = 5.64 million

Hope that helps.

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3 years ago

PERSONAL FINANCE QUESTION PLS HELP

mr Goodwill [35]

Answer:

People often buy fewer goods and services

Explanation:

This is the only option that makes sense for the question. Economic slow down is marked by the movement of money slowing down. As the movement money slows people buyer fewer goods and services.

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3 years ago

Suppose a hypothetical economy is currently in a recessionary gap of $64 billion. Four economists agree that expansionary fiscal

krok68 [10]

Answer:

a. Amount the government would have to increase spending according Economist A = $8 billion

b. Amount the government would have to increase spending according Economist B = $16 billion

Explanation:

a. Economist A

Since government spending multiplier is believed to be 8, this implies that the government has to spend an amount that when it is multiplied by 8 it will be equal to recessionary gap of $64 billion in order to close the output gap. This amount can be calculated as follows:

Amount the government would have to increase spending according Economist A = Amount of recessionary gap / Government spending multiplier according to Economist A = $64 billion / 8 = $8 billion

b. Economist B

Since government spending multiplier is believed to be 4, this implies that the government has to spend an amount that when it is multiplied by 4 it will be equal to recessionary gap of $64 billion in order to close the output gap. This amount can be calculated as follows:

Amount the government would have to increase spending according Economist B = Amount of recessionary gap / Government spending multiplier according to Economist B = $64 billion / 4 = $16 billion

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3 years ago