Private benefits are those benefits that accrue:
A. without compensation to someone other than the person who caused them.
B. indirectly to the decision maker of a market exchange.
C. directly to the decision maker of a market exchange.
D. to third parties without direct government intervention.
Answer: C
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To change the federal funds rate, the Fed
A) coordinates with banks on establishing the new rate. B) tells banks how much to charge. C) uses open market operations to change the quantity of reserves. D) changes the income tax rate on interest income. E) increases or removes money from the stock market.
What was the official policy of the British colonies toward the practice of "squatting," or freely settling and cultivating the land?
(a) Squatting was encouraged as a way to promote settlement of the land. (b) Colonial officials discouraged squatting because the indigenous populations legally owned land. (c) There was no policy toward the practice of "squatting"; it was left to the individual settlers. (d) The official policy opposed squatting because it did not involve a formal transfer of ownership.
The fact that more women have chosen to work as real wages rise is evidence that, for them:
a. leisure is an inferior good. b. income and substitution effects of higher real wages work in the same direction. c. income and substitution effects of higher real wages may work in opposite directions. d. income and substitution effects may work in opposite directions but that the substitution effect is stronger.
Which of the following best describes the situation likely to unfold after a new manufacturing firm enters an oligopolistic market?
a. The new firm is initially hampered by economies of scale. b. The new firm initially has low costs of production that increase over time. c. The new firm has high sales during its early years followed by a sales decline. d. The new firm is initially very profitable.