Inspired by the beautiful private tennis courts of some of its residents, the town of Lakeland built a pristine tennis park with five courts. Within three years the nets had been torn down, trash was piled everywhere, and graffiti was written on the courts. This story demonstrates the concept of the ______.
a. lemon problem
b. tragedy of the commons
c. moral hazard
d. adverse selection
b. tragedy of the commons
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A monopolist will maximize profit by producing the level of output at which
A. the last unit of output produced adds the same amount to total revenue as to total cost. B. the firm's total revenue exceeds total cost by the largest amount. C. marginal revenue equals marginal cost. D. both a and b E. all of the above
Economists who believe in activist policymaking argue that
A. only planned changes in the money supply impact the economy. B. decreases in aggregate demand definitely impact the economy in the short run. C. decreases in aggregate demand impact the economy only in the long run. D. only increases in the minimum wage levels improve economic well-being.
The blurring of the lines separating the subsets of the financial industry started in the:
A. 1940s B. 1960s C. 1970s D. 1990s
If demand for a product increases, ceteris paribus, the equilibrium
A) quantity decreases. B) price increases. C) price remains unchanged. D) price decreases.