An increase in economic rent is simply a transfer from the buyer to the seller without any change in quantity. Identify the underlying assumption
a. Quantity supplied remains unchanged even when economic rent increases.
b. Quantity supplied is positively related to economic rent.
c. The relation between quantity supplied and economic rent is indeterminate for nonrenewable resources.
d. Bargaining power of buyers is greater than sellers.
e. Consumer surplus is a positive function of economic rent.
a
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Answer the next question using the following budget information for a hypothetical economy. All data are in billions of dollars. Also assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$800$825$4,000Year 28508504,200Year 39008754,350Year 49509004,500Year 51,0009254,600Assume that year 1 is the first year for this economy and year 3 is the current year. What is the public debt in this economy at year 3?
A. $75 billion B. $50 billion C. $25 billion D. $0 billion
Results of research conducted regarding the Moving to Opportunity program found that
A) living in a good neighborhood helps keep people out of jail. B) people who live in wealthier neighborhoods are safer than people who live in poorer neighborhoods. C) living in a good neighborhood improves test scores in schools. D) living in a good neighborhood guarantees economic self-sufficiency.
The owner of a bakery decides to drop the price of lemon cakes by 5%, how much does quantity sold have to rise to stop the revenue from decreasing
a. 2% b. 3% c. 4% d. 5%
Foreign investors may wish to purchase U.S. assets for all of the following reasons except one. Which is the exception?
a. The rate of return on assets is higher in the United States than in other countries. b. They may wish to diversify their portfolios. c. The United States may be regarded as a relatively safer place in which to invest. d. Governments of most other industrialized countries actively discourage foreign investment. e. With their increased foreign debt burdens, investment in developing countries has become less attractive.