Consider a perfectly competitive market, with no externalities. A binding price ceiling is imposed. The decrease in market quantity relative to the perfect competition outcome is bigger when:
A. Supply is elastic
B. Supply is inelastic
C. Demand is elastic
D. Demand is inelastic
E. Need more information.
Ans: A. Supply is elastic
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When the Fed changes money supply by selling government securities, the interest rate will
A) fall unless the LM curve is horizontal. B) fall unless the IS curve is vertical. C) rise if the LM curve is vertical or upward sloping. D) remain constant if the LM curve is vertical.
Money is what people in a society regularly use when purchasing or selling goods and services.
Select whether the statement is true or false. A. True B. False
If an aluminum manufacturer does not bear the entire cost of the smoke it emits, it will
a. emit a lower level of smoke than is socially efficient. b. emit a higher level of smoke than is socially efficient. c. emit an acceptable level of smoke. d. not emit any smoke in an attempt to avoid paying the entire cost.
If a local government gives out water filters to low-income families free of charge, the water filters are:
A. public goods. B. private goods. C. external goods. D. spillover goods.