Interest payments on the national debt are not a problem because we owe all of it to ourselves
Indicate whether the statement is true or false
FALSE
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Effective cooperation among the members of a commercial society is more likely when
A) economic decisions are placed in the hands of democratically-elected committees. B) everyone's income is approximately the same. C) people produce for use rather than for profit. D) prices do not change in response to temporary changes in circumstances. E) property rights are clearly defined.
How do taxes and needs-tested spending programs work as automatic fiscal policy to dampen the business cycle?
What will be an ideal response?
Which of the following is an example of the free-rider problem?
a. Both Zoe and Zach receive low-cost dental care at the local dental school, so neither of them pays the full cost of the care. b. Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income. Yet his next door neighbor, Alice, is not eligible for the free lunch. c. Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking. d. Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one, get one free sale.
Suppose the market clearing price for gasoline is $2.5 per gallon. Now suppose that policy makers pass a law requiring that the maximum price that can be charged is $2.3 per gallon. Such a situation is an example of
A. a price floor that will lead to a surplus of gasoline on the market. B. a price ceiling that will lead to a shortage of gasoline on the market. C. a price floor that will lead to a shortage of gasoline on the market. D. a price control that will lead to a surplus of gasoline on the market.