The questions resolved by an economic system include what goods and services to produce, how they will be produced, and for whom they will be produced
Indicate whether the statement is true or false
true
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Which of the following would cause both the equilibrium price and equilibrium quantity of oysters (assume that oysters are a normal good) to decrease?
A) an oil spill that sharply reduces oyster output B) a decrease in consumer income C) a technological advancement in the production of oysters D) an increase in consumer income
You have won a contest and are allowed to choose between two prizes. One option is to receive $200 today and another $200 one year from now. The second option is $100 today and an additional $325 one year from now
At what interest rate (if any) is the present value of the two prizes identical? A) 0 percent B) 5 percent C) 10 percent D) 25 percent E) none of the above
According to Friedman, people behave differently with respect to the different kinds of incomes they earn. For example, the MPC in 2002 is associated with their _________ income earned in 2000 . The difference between the income earned in 2001, and that income in 2002 is called ___________ income
a. relative; absolute b. absolute; relative c. permanent; transitory d. transitory; permanent e. transitory; transitory
Often natural monopolies are regulated by:
a. setting the price equal to marginal cost, even if marginal cost is less than average total cost. b. setting the price equal to average total cost, so as to maximize consumer surplus and allow the firm to break even. c. having the firm produce the quantity at which marginal revenue equals marginal cost. d. having the firm produce the quantity at which marginal revenue equals average total cost.