The common pool problem
a. occurs whenever goods are not rivals in consumption
b. is an example of adverse selection
c. arises whenever property rights are well defined
d. is usually caused by government intervention into private markets
e. is one in which resources to which access is unrestricted will tend to be overused
E
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As a result of the 2007-2009 financial crisis, which two firms became bank holding companies, allowing them to engage in commercial banking activities?
A) Lehman Brothers and Merrill Lynch B) Freddie Mac and Fannie Mae C) Morgan Stanley and Goldman Sachs D) Enron and WorldCom
As the capital-labor ratio increases, investment per worker
A) increases at an increasing rate. B) decreases at a constant rate. C) increases at a decreasing rate. D) decreases at an increasing rate.
If the annual real interest rate on a 10-year inflation-protected bond equals 1.5 percent and the annual nominal rate of return on a 10-year bond without inflation protection is 4.2 percent, what average rate of inflation over the ten years would make holders of inflation-protected bonds and holders of bonds without inflation protection equally well off?
A. 4.2 percent B. 2.7 percent C. 1.5 percent D. 5.7 percent
When demand is elastic, a decrease in price will
A) decrease total revenue. B) not change total revenue. C) increase total revenue. D) reduce quantity demanded.