Sam lives in a town with a population of 3,000 . He says, "This town really needs a pizza restaurant. People want pizza and would be willing to pay a lot for it, but no one will open a pizza place because they couldn't make any money." Evaluate Sam's statement
His statement clearly conflicts with the economic way of thinking. If there is money to be made selling pizza in Sam's hometown, someone will come along to fill this unmet demand. If this proves profitable, other pizza restaurants are likely to open. On the other hand, if the town does not value pizza, the restaurant will lose money and soon close. Likely the town does not value pizza enough to support a restaurant. If it did, we would expect a pizza restaurant to be there.
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A) reduce; financial B) reduce; real C) raise; financial D) raise; real
Private sector investment is usually done through borrowing. The economic variable that influences the level of investment is the
A. inflation rate. B. per capita GDP. C. the real interest rate. D. employment rate.
Compared with the market clearing price of a health care service covered by Medicare, the Medicare program pays a ________ price to health care providers and charges a ________ price to consumers
A) lower, lower B) lower, higher C) higher, lower D) higher, higher
Increasing the income tax rate ________ the ________
A) does not change; supply of labor B) decreases; supply of labor C) increases; supply of labor D) decreases; demand for labor E) increases; demand for labor