Pleasure boaters enjoy the use of waterways, but sometimes run into problems and need rescue. Coast Guard boats, supported by tax revenue, are often used for rescue. Is it likely that there will be an efficient amount of boating and rescuing?
What will be an ideal response?
No. The full cost of boating includes the cost of rescue, based on the amount of rescue that a typical boat ride requires. Rescue is supported by general tax revenue, not a charge on boats or other charges directly paid by the boaters. The social cost of the boat trips is below the private cost, resulting in too many boat outings. An appropriate response is to charge boaters a fee, based on usage that covers the cost of providing rescue services.
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When disposable income increases, saving will
A) not change. B) increase, and the supply of loanable funds curve shifts rightward. C) decrease, and there is a movement downward along the supply of loanable funds curve. D) increase, and there is a movement upward along the supply of loanable funds curve. E) decrease, and the supply of loanable funds curve shifts leftward.
What is the difference between the functional and the personal distribution of income?
What will be an ideal response?
If the interest rate is 4.5 percent, what is the present value of a payment of $500 to be made one year from today?
a. $457.14 b. $468.02 c. $478.47 d. None of the above are correct to the nearest cent.
Which would be considered to be one of the factors that shift the aggregate supply curve? A change in:
a. Business productivity b. Net export spending c. Consumer expectations d. Consumer spending