Why do markets exist?
a) Markets ensure that government does not intervene in the production of goods and services
b) Markets provide self-sufficent people with public places for the exchange of ideas
c) Markets ensure economic equity for all people
d) Markets allow people to buy what they need to consume and sell the specialized goods and services they produce
Ans: d) Markets allow people to buy what they need to consume and sell the specialized goods and services they produce
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According to this Application, studies estimated that a decrease of consumer wealth of $1 would ________ consumption spending by somewhere between ________
A) lower; $0.21 and $0.72 B) raise; $0.10 and $0.50 C) raise; $0.21 and $0.72 D) lower; $0.02 and $0.07
Which of the following shifts the supply curve of popcorn leftward?
A) a decrease in the price of popcorn B) an increase in the price of popcorn C) a technological development in the production of popcorn D) a decrease in the number of popcorn suppliers E) a decrease in the cost of producing popcorn
The proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own, is called
a. the Pigovian theorem. b. a corrective tax. c. the externality theorem. d. the Coase theorem.
Which of the following is a tool of monetary policy?
A. Buying and selling government bonds B. Making loans to banks C. Setting reserve requirements D. All of the above are tools of monetary policy.