True or False
|
Statement |
The statement is (circle the correct answer) |
|
According to the Coase Theorem concerning negative externalities, in the absence of transactions costs, and with symmetric information, the initial assignment of property rights does not matter in determining the efficient allocation of resources. |
True False |
|
As the Gini coefficient increases, the degree of income inequality declines. |
True False |
|
In the presence of a positive externality, the perfectly competitive market quantity will be lower than the socially optimal quantity. |
True False |
|
According to economic theory, under perfect competition in input markets the rental rate of capital is equal to the marginal product of capital. |
True False |
|
Rent is the amount a producer is compensated over the minimum amount they would have been willing to accept to produce a given unit of output. |
True False |
|
In the presence of a negative externality, the size of the Pigouvian tax is equal to the marginal cost of the externality at the perfectly competitive outcome. |
True False |
|
A multiplicative social welfare function increases as individual levels of utility increase but decreases for a given average level of utility as inequality increases. |
True False |
|
Adverse selection is when provision of insurance induces changes in behavior that make use of insurance more likely |
True False |