The opportunity cost and the money cost of a good
A. can be the same in a well-functioning free market.
B. are never the same.
C. matter only to the purchaser of the good.
D. are not reflected in its price.
Answer: A
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To face scarcity means individuals
A) choose. B) economize. C) sacrifice some plans over others. D) all of the above.
Crowding out refers to the government's increased demand for credit, which:
a. displaces some private sector consumption by decreasing the price level. b. displaces some private sector borrowing by decreasing the interest rate. c. displaces some private sector borrowing by increasing the interest rate. d. hires labor away from the private sector e. displaces some import purchases by the private sector.
If the Fed conducts an open market purchase of bonds, the
a. money supply decreases as reserves are injected into the banking system b. demand for money increases as reserves are drained from the banking system c. demand for money decreases as reserves are injected into the banking system d. money supply increases as reserves are injected into the banking system e. money supply increases as reserves are drained from the banking system
The external costs of cigarettes are related to the health problem smoking produces for both smokers and nonsmokers. One estimate places these costs at 29 cents per pack. Presently, sales and excise taxes on cigarettes average about 37 cents per pack. These estimates suggest that (i) cigarette consumption is below the optimal or efficient quantity; (ii) cigarette taxes should be reduced
a. i and ii b. i but not ii c. ii but not i d. neither i nor ii