Economics Homework Five Answers - Student Nineteen
Economics Homework 5 Zachary C. 10-14-09
1. Efficiency is maximizing the potential of time, resources, and opportunities.
2. A and B are compliments. X and Y are supplements.
- You have it backwards, and misspelled "complements". Also, "substitutes", not "supplements". (Minus 2).
3. The marginal cost would be $20.
4. A hamburger is an inferior food, because it is less desirable when income increases. Steak is a normal good, because its price increases when income increases.
- Correct again.
5. The Coase theorem states that the holder of property rights is unimportant to the outcome of the efficiency of the property, because the property will always utilize the maximum amount of efficiency because of the incentive to do so by the owners or potential owners. The theory may not apply if transaction costs are included.
- Excellent, may use as a model.
6. The owner should figure out a way to maximize revenue without it going below the marginal cost.
- He can simply sell units. Marginal revenue exceeds marginal cost, and that is all he needs. (Minus 1).
7. The Coase theorem supports the fact that individual and companies dislike transaction cost because it makes transactions increasingly difficult, complicated, and more expensive. Thus, maximum efficiency is usually not obtained because of the undesirable transaction costs.
- OK, but tie that into government regulation. (Minus 1)
- 66/70, with some good answers.--Andy Schlafly 20:34, 18 October 2009 (EDT)