When both internal and external costs for using a scarce resource are included, then there is

A. an increase in the price of the good.
B. an increase in the production of the good.
C. a positive externality.
D. a negative externality.


Answer: A

Economics

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If there is an excess supply of sport utility vehicles, then:

A. quantity demanded is greater than quantity supplied. B. quantity supplied is greater than quantity demanded. C. demand is greater than supply. D. supply is greater than demand.

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Refer to the scenario above. If they are the only bidders in the auction and each bidder bids up to his value for the good, the winner will earn a surplus of ________

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The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a price support program to achieve their goal. How much wheat must the government buy?

A. 10 billion bushels per year B. 4 billion bushels per year C. 6 billion bushels per year D. None

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In response to significant economic problems, the Obama administration recommended

a. more tax cuts. b. increased government spending. c. substantial aid to state and local governments. d. all of the above

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