Suppose a hurricane causes a great deal of destruction in Florida. After the hurricane, it takes much longer than usual for the reconstruction of homes to take place. A possible explanation for this is
A. greed by suppliers of construction materials increased.
B. environmental restrictions on lumbering in the Pacific Northwest were relaxed.
C. prices of construction materials fell in the rest of the nation
D. government prevented price gouging during the reconstruction period.
Answer: D
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A competitive market economy is unlikely to provide an efficient quantity of some public goods because:
a. only the government has the vast resources necessary to produce public goods. b. the nature of public goods makes it difficult for producers to withhold them from nonpaying consumers. c. the technology involved in the production of public goods makes it difficult for private firms to produce them even though, once produced, they could be marketed efficiently. d. private production of public goods generally results in a large amount of profit, which is difficult for a firm to effectively pay out to shareholders.
An increase in the demand for a product will cause the
a. demand for and prices of the resources used to produce the product to increase. b. demand for and prices of the resources used to produce the product to decrease. c. demand for and prices of the resources used to produce the product to remain unchanged. d. price of the product to decrease.
Assume that each day ten thousand children watch Sesame Street on public television and that watching Sesame Street generates a benefit of $100 per child per year. Once a year, public television holds a pledge drive asking viewers to make voluntary contributions in order to keep the programming available to everyone. The broadcast of Sesame Street yields a total social benefit of ________ per year.
A. $10,000 B. $100 C. $1,000,000 D. $0
Refer to the information provided in Figure 15.4 below to answer the question(s) that follow. 
Figure 15.4 Refer to Figure 15.4. Assume The Hand Made Shirt Shop has fixed costs of $150 and is a monopolistically competitive firm. To maximize profits in the short run, this firm should produce ________ personalized sweatshirts.
A. 0 B. 50 C. 70 D. 75