When households hold money for unplanned expenditures and emergencies, it is called
A) the speculative demand for money.
B) the transactions demand for money.
C) the irrational demand for money.
D) the precautionary demand for money.
D
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What will happen if the institutions in an economy transform from inclusive to extractive?
A) The return-to-entrepreneurship schedule will shift rightward and the opportunity cost to entrepreneurship will decrease. B) The return-to-entrepreneurship schedule will shift leftward and the opportunity cost to entrepreneurship will decrease. C) The return-to-entrepreneurship schedule will shift leftward and the opportunity cost to entrepreneurship will increase. D) The return-to-entrepreneurship schedule will shift rightward and the opportunity cost to entrepreneurship will increase.
There is a deadweight loss if a natural monopoly is regulated to use
A) marginal cost pricing and if it is regulated to use average cost pricing. B) average cost pricing and if it is allowed to be unregulated and maximize its profit. C) marginal cost pricing and if it is allowed to be unregulated and maximize its profit. D) None of the above answers is correct.
The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a voluntary production reduction program to achieve their goal. What is the size of the producer surplus?
A. $8 billion B. $4.5 billion C. $12.5 billion D. $6.5 billion
The local labor market for lawn-mowing workers is initially in equilibrium. These workers are also able to clean swimming pools and have no preference for one job over the other. If the wage rate for pool cleaning rises, which of the following would occur in the lawn-mowing labor market?
a. Both labor demand and labor supply will drop, leading to a lower wage rate and lower employment. b. Both labor demand and labor supply will rise, leading to a higher wage rate and lower employment. c. Labor supply will drop, leading to a higher wage rate and lower employment. d. Labor supply will drop, leading to a lower wage rate and lower employment. e. Labor demand will drop, leading to a lower wage rate and lower employment.