Scarcity exists in society because there are:
(a) Insufficient levels of government involvement in reallocating income.
(b) A large number of self interested people.
(c) Limited wants relative to abundant resources.
(d) Unlimited wants in the face of limited global resources.
Answer: (d) Unlimited wants in the face of limited global resources.
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Productivity per worker has increased in the past primarily through
a. hiring more teenagers. b. hiring more women. c. medical benefits. d. technological development.
Both sugar and fructose can be used in the production of candy. If the price of sugar increases,
a. the demand for sugar increases b. sugar becomes relatively more expensive than fructose only if the price of fructose falls c. sugar becomes relatively more expensive than fructose, other things constant d. the price of fructose immediately increases e. the price of fructose immediately decreases
If the government were to restrict consumption to the efficient level in a market where a negative externality is present, the market outcome:
A. would not be efficient. B. would then be efficient. C. would be equitable. D. None of these statements is necessarily true.
Use the following table to answer the next question. The money supply and investment are in billions.Money Supply (billions of dollars)Interest RateInvestment (billions of dollars)$507%$100606110705120804130903140Assume that the MPC is 0.8 and the reserve requirement is 0.1. If the Federal Reserve needs to increase aggregate demand by $100 billion at each price level to move the economy back to full employment and the current interest rate is 7%, then the Federal Reserve should ________ the money supply by ________.
A. increase, $20 billion B. decrease, $10 billion C. decrease, $20 billion D. increase, $10 billion