Many species of animals are common resources, and many must be protected by law to keep them from extinction. Why is the cow not one of these endangered species even though there is such a high demand for beef?
a. Cows reproduce at a high rate and have adapted well to their environment.
b. Public policies protect cows from predators and diseases.
c. Cows are privately owned, whereas many endangered species are owned by no one.
d. There is a natural ecological balance between the birth rate of cows and human consumption.
c
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An increase in demand coupled with a decrease in supply results in a(n)
a. increase in equilibrium price and an ambiguous effect on equilibrium quantity b. increase in equilibrium quantity and a decrease in equilibrium price c. decrease in equilibrium quantity and an ambiguous effect on equilibrium price d. surplus e. decrease in the equilibrium price and quantity
Too much of society's scarce resources are used to produce goods in monopoly markets
a. True b. False Indicate whether the statement is true or false
Suppose that flu shots create a positive externality equal to $9 per shot. Further suppose that the government offers a $9-per-shot subsidy to producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced?
a. They are equal. b. The equilibrium quantity is greater than the socially optimal quantity. c. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.
Answer the following statement(s) true (T) or false (F)
1. The government can influence the economy through its fiscal policy by making changes in the money supply. 2. When the Federal Reserve Bank buys or sells U.S. securities, it changes the level of reserves in the banking system, which has an effect on interest rates. 3. The discount rate is the interest rate banks are charged when they borrow money from the Fed. 4. The Fed relies primarily on changes in the reserve requirement (the minimum amount of money banks must hold in reserve to cover deposits) to ease or tighten the money supply.