In Figure 4.4, supply elasticity is infinite in graph:
A. A.
B. B.
C. C.
D. D.
Answer: B
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Legislation to protect red-cockaded woodpeckers created incentives that resulted in premature harvesting of trees the woodpeckers like to nest in. This is an example of which of the following?
a. Association is not causation. b. the fallacy of composition c. the use of ceteris paribus conditions in economic analysis d. Good intentions do not always lead to desirable outcomes.
Suppose a family member approaches you to borrow $2,000 for the down payment on an automobile. You have the cash available in a savings account that currently earns 5% annual interest. You and the family member consider the following repayment options:(i) Borrower repays $259 each year over the next ten years(ii) Borrower repays $300 each year over the next five years, plus a lump-sum payment of $895 in the fifth year.(iii) Borrower repays you $2,100 at the end of one year. For each of the options above, show that the present values of each option are approximately equal. Then, relate each of the options above to the four types of bonds, indicating which option is equivalent to which type of bond. Explain why.
What will be an ideal response?
Economic models are only applicable to free-market countries
A) False. Economic models are applicable wherever there is scarcity. B) True. Economic models are applicable only when private citizens are free to make their own decisions. C) False. Economic models are applicable in all countries with more than one million people, regardless of political structure. D) True. Economic models are only applicable when government is small relative to the rest of the economy.
An optimal consumption bundle will always be on the highest attainable indifference curve for the consumer.
Answer the following statement true (T) or false (F)