Related to the Economics in Practice on p. 525: If the estate in the Chekhov play Uncle Vanya is earning 2 percent, yet a potential buyer wants to earn more than 2 percent, the sales price of the estate would have to
A. rise.
B. fall.
C. double.
D. No price will bring a higher return.
Answer: B
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The Federal Reserve System regulates the money supply primarily by
A. controlling the production of coins at the U.S. mint. B. altering the reserve requirements of commercial banks and thereby the ability of banks to make loans. C. restricting the issuance of Federal Reserve Notes because paper money is the largest portion of the money supply. D. altering the reserves of commercial banks, largely through sales and purchases of government bonds.
Legal ceilings on the rate of interest charged to individuals
A) guarantee credit is allocated according to need rather than ability to pay. B) make it easier for people with poor credit ratings to obtain loans. C) reduce the probability corporations will obtain scarce credit by bidding funds away from consumers. D) accomplish all of the above. E) accomplish none of the above.
For a short-run cost function which of the following statements is (are) not true?
a. The average fixed cost function is monotonically decreasing. b. The marginal cost function intersects the average fixed cost function where the average variable cost function is a minimum. c. The marginal cost function intersects the average variable cost function where the average variable cost function is a minimum. d. The marginal cost function intersects the average total cost function where the average total cost function is a minimum. e. b and c
Market failures:
A. can always be corrected through government action. B. lead to a desired allocation of resources. C. are sometimes made worse by government failures. D. can never be corrected through government action.