Countries such as Brazil, India, and Moldova-well-known sources of organ donors-have banned buying and selling organs. This legal action comes at the risk of driving the trade underground. What idea from Chapter 1 of the text does this story best illustrate?
A. Economic forces always operate despite legal forces.
B. Legal and social forces can eliminate economic forces.
C. Marginal revenue should equal marginal cost.
D. The invisible hand is not always invisible.
Answer: A
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The short-run market supply curve is
a. the horizontal summation of each firm's short-run supply curve. b. the vertical summation of each firm's short-run supply curve. c. the horizontal summation of each firm's short-run average cost curve. d. the vertical summation of each firm's short-run average cost curve.
Which of the following is the second step in the model-building process?
a. Include all possible variables that affect the model. b. Collect data and test the model. c. Identify the problem. d. Develop a model based on simplified assumptions.
A country has GDP of $700 billion, consumption of $450 billion, government expenditures of $100 billion, and domestic investment of $200 billion. What is its supply of loanable funds?
a. $350 billion b. $250 billion c. $200 billion d. $150 billion
Open market purchase will result in:
A) increase in bank reserves and a decrease in the federal funds rate. B) increase in bank reserves and an increase in the federal funds rate. C) decrease in bank reserves and a decrease in the federal funds rate. D) decrease in bank reserves and an increase in the federal funds rate.