Which statement most accurately describes economics?
A. Economics is the study of social values a society should choose.
B. Economics is the study of how people make choices to satisfy their wants.
C. Economics is the study of how people make money.
D. Economics is the study of how to eliminate scarcity.
Answer: B
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If, at the current interest rate, the quantity of loanable funds supplied is less than the quantity of loanable funds demanded, then
A) the supply of loanable funds curve shifts leftward and the real interest rate rises. B) the real interest rate falls. C) the supply of loanable funds curve shifts leftward and the real interest rate falls. D) the real interest rate rises. E) the supply of loanable funds curve shifts rightward and the real interest rate rises.
Diminishing marginal utility implies that as an individual consumes more of a good, beyond some point another unit will add:
A. the same pleasure as the preceding unit. B. more pleasure than the preceding unit. C. more units of utility than the preceding units. D. less pleasure than the preceding unit.
After a drop in nominal aggregate demand, if menu costs prevent firms from reducing prices, this is considered ________ act by firms ________ a "macroeconomic externality."
A) a rational, because it produces B) a rational, that happens to produce C) an irrational, because it produces D) an irrational, that happens to produce
Which of the following about public goods is true?
a. Consumption of a public good by one individual reduces the availability of the good for others. b. It is extremely difficult to limit the benefits of a public good to only the people who pay for it. c. Public goods are free to a society when they are produced by the government. d. From an efficiency standpoint, a market will generally supply too much of a public good.