If the price of a resource reaches the choke price, that means that
a. The physical reserves are zero
b. The economic reserves are zero
c. The environmental costs have been fully internalized
d. Environmental costs need to be internalized
e. Prices will continue to fall
Answer: b. The economic reserves are zero
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A local cable company has its rates set at P = $15 by a regulatory commission. Its current output is 10,000 households and its costs are as follows: ATC = $17; AVC = $14; and MC = $15 . From this, we can tell that this is:
a. a fair price, and the firm earns a normal profit. b. a fair price, and the firm earns an economic loss. c. marginal cost pricing, and the firm earns a normal profit. d. marginal cost pricing, and the firm earns an economic loss. e. the same price that an unregulated monopolist would charge.
The statement, "Violent crime has decreased in the last five years," is:
a. obviously wrong and, therefore, cannot be a positive statement. b. normative since it can be answered by simply looking at the facts. c. positive because it is testable. d. not very interesting because all normative issues are of little importance.
Which of the following components is not included in the M2 definition of money?
A. Bonds B. M1 C. Savings and money market accounts D. Small-denomination time deposits
Research by Richard Layard indicates that happiness
A) increases as output per capita increases. B) decreases as output per capita increases. C) does not change as output per capita changes. D) appears to depend on people's relative incomes.