Which would cause an increase in the supply of a product at a given price?
a. An increase in the costs of producing a substitute product
b. A reduction in the cost of resources to produce the product
c. An increase in the costs of producing a complementary product
d. An increase in the price of the product
Answer: b. A reduction in the cost of resources to produce the product
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Which of the following is a "free" good?
A) Elderly health care, which is covered by Medicare B) Health care for the poor, which is covered by Medicaid C) Higher education in Georgia, which is paid for by lottery revenue D) All of the above. E) None of the above.
In 1985, Alice paid $20,000 for an option to purchase ten acres of land. By paying the $20,000, she bought the right to buy the land for $100,000 in 1992. When she acquired the option in 1985, the land was worth $120,000
In 1992, it is worth $110,000. Should Alice exercise the option and pay $100,000 for the land? A) Yes. B) No. C) It depends on what the rate of inflation was between 1985 and 1992. D) It depends on what the rate of interest was.
If money is moved from a consumer checking account into a consumer savings account,
A. M1 and M2 both remain unchanged. B. M1 decreases and M2 remains unchanged. C. M1 and M2 both increase. D. M1 increases and M2 decreases.
Is it possible for a country to have an absolute disadvantage and a comparative advantage in the production of a good?
A. No, these are incompatible on theoretical grounds. B. No, theory prevents it, but some economists claim it could occur. C. Yes, this situation can occur. D. Yes, in theory, although not in reality.