Dan missed class the day the professor covered the circular flow model. Dan asked his friend Joan to explain markets to him. Joan correctly stated that a market
A) must have many buyers and only one seller, who is willing to sell to all the buyers.
B) is only a place to purchase groceries.
C) requires a physical location for buyers and sellers to get together.
D) must include a written contract between buyers and sellers.
E) is any arrangement that brings buyers and sellers together.
E
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A "free rider" is someone who
A) pursues his or her own selfish interests. B) generates negative externalities for everyone else. C) accepts benefits without paying his or her share for receiving the benefits. D) actually improves the efficiency of market processes by buying low and selling high.
All of the following are examples of residential investment spending except
A) the purchase of a new apartment building by a property management company. B) Sandra purchases her childhood home from her parents. C) the purchase of a new home by the MacGregor family. D) Tobias purchases a new duplex and plans to live in one half and rent the other half to his brother Dorian.
To sell one more unit of a good, a monopolist must
A) lower the price on the last unit only. B) lower the price on all units. C) raise the price only on the last unit sold. D) raise the prices on all goods.
Taxes play an important role in bond returns because:
A. all interest from owning bonds is taxed. B. some bond interest is exempt from some government taxation, so after tax returns across bonds can vary considerably. C. all governments (federal, state, municipal) tax bonds similarly. D. only U.S. Treasury bonds are tax-exempt, so investors should always seek higher returns from other bonds.