Economics is a
A) hard science.
B) physical science.
C) natural science.
D) social science.
D
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An open market purchase of securities by the Fed leads to all of the following EXCEPT
A) an initial increase in excess reserves. B) an increase in bank lending. C) a decrease in the quantity of money. D) an increase in banks' reserves. E) an increase in the monetary base.
Define the benefit principle. List two real world taxes that have the features of a tax based on the benefit principle. Why can't the benefit principle be the sole principle of taxation?
What will be an ideal response?
Continuing with the same vacation-insurance company from the preceding question, is there any vacation-day price that would both strictly increase the family's expected utility (compared to no insurance) and strictly increase the profits of the risk-neutral insurance company?
a. No. b. Yes, 3 or 4. c. Yes, 4. d. Yes, 4 or 5.
The first step of the four step process is to
a. identify the new equilibrium and then compare the original equilibrium price and quantity to the new equilibrium price and quantity. b. decide whether the economic change being analyzed affects demand or supply. c. draw a demand and supply model before the economic change took place. d. decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram.