When the Fed buys $100 worth of bonds from a primary dealer, reserves in the banking system
A) increase by $100.
B) increase by more than $100.
C) decrease by $100.
D) decrease by more than $100.
A
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The above figure illustrates a single-price unregulated monopolist. If the monopolist maximizes its profit, the deadweight loss equals ________
A) $10,000 B) $20,000 C) $45,000 D) $40,000
The Hawaiian island of Lana'i is privately owned by Castle & Cooke and for generations most of its land was used to grow pineapples. Now, many of the pineapple fields have been replaced by tourist accommodations, including a pair of world-class hotels and a top rated golf course. What would an economist say about this change in land-use patterns?
A) While growing pineapples used the island's land more efficiently, tourism provides utility to the largest number of people. B) Economic rent has allocated the island's resources to their highest-valued use: tourism. C) Agriculture is still the land's highest-valued and most efficient use, but tourism earns more profits for Castle & Cooke. D) To find the land's economic rent, add the price per acre that land on Lana'i would be worth if used to grow pineapples to the value per acre when used for a golf course.
A model of choice in economics starts by assuming that:
a. people try to minimize their losses. b. people try to maximize their consumption. c. people try to minimize their costs. d. people try to maximize their utility.
Higher efficiency in the economy can be reached if prices are held low by law
a. True b. False Indicate whether the statement is true or false