Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below.
If the park is currently 2 acres, and land costs $20 per acre, the town should:
A. purchase two additional acres.
B. purchase 4 additional acres.
C. reduce the size of the park.
D. not change the size of the park.
Answer: A
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Refer to the above figure. At a price of $2 per gallon, the quantity demanded of gasoline is
A) 80,000 gallons per month. B) 100,000 gallons per month. C) 60,000 gallons per month. D) 140,000 gallons per month.
If the money wealth, interest rate, and international effects reduce the quantity of aggregate demand by 3 percent when the price rises by 6 percent and the multiplier is 2, then the slope of the aggregate demand curve is:
A. ?3. B. ?2. C. ?1. D. ?1/2.
Which of the following correctly describes fractional reserve banking?
A. The federal government only insures a fraction of the deposits at most banks. B. Banks keep a fraction of their loans with other banks to maintain the quality of their loan portfolio. C. Banks can loan out all but a small fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults. D. Banks can loan out all but a fraction of its own money, and all but a fraction of all money deposited at the bank.
A firm that generates pollution is illustrated in Figure 9.7. If the government imposes a pollution tax equal to P3, the firm's abatement choice will be:
A. A1. B. A2. C. A3. D. less than A1.