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
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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.
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 ________
A) $500 B) $625 C) $125 D) $150
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
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