Which of the following would tend to decrease velocity?
A. An increase in interest rates
B. More frequent paychecks
C. Expected decreases in inflation
D. More efficient payment systems
Answer: C
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Free riding would be an appropriate description of which of the following behaviors?
a. People who enjoy having nature conserved by The Nature Conservancy but who do not contribute to the organization. b. People crowding into a public park on a nice summer day. c. A fisher putting a more powerful motor on her boat so as to get to the fishing grounds before others. d. Computer software developers who do not charge for their finished programs.
The aggregate production function used in the Solow model expresses GDP as a function of:
A) level of technology and total efficiency units of labor only. B) physical capital and level of technology. C) physical capital and total efficiency units of labor only. D) physical capital, level of technology, and total efficiency units of labor.
The figure above shows the market for a good with an external benefit. If the market is competitive and the government takes no action, the equilibrium quantity is ________ units and the equilibrium price is ________ per unit
A) 8; $150 B) 8; $300 C) 10; $250 D) 10; $100 E) 10; $150
Suppose Canon Inc decided to invest 45 billion yen in developing and launching a new model of its digital camera, expecting that it will bring additional sales of 60 billion yen
The company has already invested 38 billion yen when the marketing department suddenly finds out that the introduction of a similar camera by Sony will reduce Canon's expected additional sales to 30 billion yen. The company's management is trying to decide whether to continue investing in the new product or close the project. Canon hires you as an economic consultant. So, think like an economist to help the company's management make their decision: a) At this point in time, what is Canon's marginal cost of introducing the new product? b) What is Canon's marginal benefit from introducing the new product? c) Will you advise Canon to finish the project and introduce the new product? Why or why not? What principles of economic thinking will help you analyze the situation and make the right choice?