Question

In: Economics

1)Which of the following describes a reason that firms may operate more efficiently than individual producers?...

1)Which of the following describes a reason that firms may operate more efficiently than individual producers?

Limited liability increases a firm's access to credit

Transaction costs of production through the market exchange is greater than within the firm

All of these answers

2)

The behavior of potential buyers is represented by ___________ and the behavior of potential sellers is represented by __________.

the individual utility function; the production function

the individual utility function; the market supply function

the market demand function; the production function

the market demand function; the market supply function

Expert Solution

1) Option c - All of these answers

Firms can operate more efficiently because of these two reasons :

Limited liability increases a firm's access to credit - The limited liability of a firm separates the management people from the ownership rights of the firm. The is an advantage to the companies and they can easily take credit without fearing of losing everything in case of bankrupcy. Individual producers on the other hand, has the fear of losing everything, even their personal property when there is bankrupcy.

Transaction costs of production through the market exchange is greater than within the firm. - A firm can avoid some of the transaction cost using price mechanism which individual producers cannot.

2) Option d - the market demand function; the market supply function.

The behaviour of potential buyers is represented by the market demand function and the behaviour of potential sellers is represented by the market supply function.

Demand curve shows how the quantity demanded changes when the price changes and it is downward sloping since quantity demanded increases when price decreases and quantity demanded decreases when price increase, other things remaining constant. Demand curve represents individual demand and the market demand function represents the market demand adding all the individual's demand.

Similarly, the supply curve shows how the quantity supplied changes when the price change and it is upward sloping since quantity supplied increases when price increases and quantity supplied decreases when price decreases, other things remaining constant. Supply curve represents individual supply and the market supply function represents the market supply adding all the individual's supply.

The production function shows how output changes due to changes in capital and labor and it is not related to the behavior of potential buyers or sellers. So, all the other options are not correct.

Rahul Sunny answered 4 months ago

Which of the following is NOT a reason that Disability Insurance may be more important than...

Which of the following is NOT a reason that Disability Insurance may be more important than Life Insurance? Disability Insurance will often have a higher capital (lump sum) payout than Life Insurance. The likelihood of becoming disabled during a person's employment years is equal to, or greater than, the likelihood of passing away. When a family's primary income earner becomes disables, expenses may increase. In addition to needing his/her pre-disability income, the disabled person may need special equipment, rehabilitation, or...

1. Which of the following describes an endocytosis? There may be more than one answer. Select...

1. Which of the following describes an endocytosis? There may be more than one answer. Select one or more: a. A cell engulfs a bacterium by pushing its cell membrane around the bacterium forming a phagosome that will pinched off from the cell membrane and enter the cytoplasm. b. Specific solutes accumulate along an indented cell membrane that will form into an endosome and it will pinch off from the cell membrane and enter the cytoplasm. c. A process that...

According to the efficiency wage theory, firms operate more efficiently if wages are above the equilibrium...

According to the efficiency wage theory, firms operate more efficiently if wages are above the equilibrium level. Why would firms want to keep wages high? Explain by referring to the four variants of this theory.

A politician makes the following argument: ‘The economy would operate more efficiently if frictional unemployment were...

A politician makes the following argument: ‘The economy would operate more efficiently if frictional unemployment were eliminated. Therefore, a goal of government policy should be to reduce the frictional rate of unemployment to the lowest possible level.’ Briefly explain whether you agree with this argument.

Which of the following statements is correct? More than 1 answer may be correct. a) Cilia...

Which of the following statements is correct? More than 1 answer may be correct. a) Cilia continue to work effectively in people with late-stage COPD b) The only cause of COPD is smoking c) People with COPD tend to develop chronic O2 retention d) Arterial blood was immediately drawn to analyze the levels of O2, CO2, and pH

A) Which of the following statements are true? Note that there may be more than one...

A) Which of the following statements are true? Note that there may be more than one correct answer; select all that are true. As the p-value increases, the evidence against the null hypothesis also increases. In hypothesis testing, if the p-value is sufficiently small, then the null hypothesis can be rejected in favour of the alternate hypothesis. If the null hypothesis is true, then the p-value will always be greater than 0.1. If the null hypothesis is false, then the...

Which of the following accurately describes the circumstances in which an individual is considered to be...

Which of the following accurately describes the circumstances in which an individual is considered to be a resident of Canada? Question 1 options: 1) When the individual is a citizen of Canada 2) When 90% or more of the individual's income originates in Canada 3) When the individual maintains a continuing state of relationship with Canada 4) When the individual is domiciled in Canada for more than 3 months of the year

1.Which of the following characterizes a relative polycythemia? There may be more than one answer. Select...

1.Which of the following characterizes a relative polycythemia? There may be more than one answer. Select one or more: a. A type of polycythemia that promotes erythropoiesis; therefore, increases the number of circulating erythrocytes above normal. b. A type of polycythemia that does not promote erythropoiesis but increases the number of circulating erythrocytes above normal. c. Hypovolemic shock d. Anemia e. High altitude 2.What is TRUE about diabetes? There may be more than one answer. Select one or more: a....

2. There are far more consumers of agricultural commodities than there are producers; but agricultural producers...

2. There are far more consumers of agricultural commodities than there are producers; but agricultural producers have consistently been able to get Congress to vote them subsidies at taxpayer expense and supply restrictions at the consumer's expense. How can the success of the agricultural lobby be explained by “the general rule of political economy”?

Which of the following statements are TRUE? Note that there may be more than one correct...

Which of the following statements are TRUE? Note that there may be more than one correct answer; select all that are true. There are countably infinite values of X in a continuous uniform distribution. For a continuous uniform distribution defined on the interval [a,b], P(X < a) and P(X > b) is undefined. The mean and the variance of a continuous uniform random variable are the same. In a continuous uniform distribution, the mean and the median are the same....