At the optimal quantity of a public good:
A. marginal benefit exceeds marginal cost by the greatest amount.
B. total benefit equals total cost.
C. marginal benefit equals marginal cost.
D. marginal benefit is zero.
Answer: C
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According to the economic way of thinking, alcohol prohibition in the U.S
A) effectively destroyed peoples' incentives to produce and drink liquor. B) abolished the supply and demand process in liquor. C) led to a surge in prices and considerable profit opportunities for people willing to break the law. D) failed to make liquor truly illegal.
Forty or so dealers establish a "market" in these securities by standing ready to buy and sell them
A) secondary stocks B) surplus stocks C) U.S. government bonds D) common stocks
When economists state that money is neutral in the long run, they mean that in the long run,
A) fluctuations in the money supply are equally likely to lead to recessions as to expansions. B) changes in the money supply have the same impact on the rich as they do on the poor. C) the level of output is independent of the nominal money supply. D) the price level is independent of the nominal money supply.
The AD curve shifts to the right when
a. the Fed alters its fiscal policy rules b. any economic shock disrupts the economy c. the AS curve does not shift d. new trade legislation is passed e. positive demand shocks occur