Which of the following is true about public goods?
A. They are only produced by government agencies.
B. They will be over supplied by the private sector.
C. They are excludable since those who do not pay for them can be excluded from enjoying them.
D. They bestow collective benefits on members of society.
Answer: D
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Average total cost is equal to
A) average fixed cost + average variable cost. B) total cost ÷ quantity. C) the change in total cost when output changes by one unit. D) Answers A and B are correct. E) Answers A and C are correct.
On the graph above, an example of a positive demand shock is the movement from point ________ to point ________
A) F; G B) H; I C) F; H D) H; F E) none of the above
Answer the following statements true (T) or false (F)
1. Collateral means something valuable—often property or equipment—that a lender would have a right to seize and sell if the loan is not repaid. 2. Insurance companies price their premiums based on what each customer can afford to pay. 3. Adverse selection is a type of asymmetric information in which the seller has more information than the buyer, making it hard for the buyer to know how much to pay. 4. In many cases of asymmetric information, the seller has more information than the buyer. When the buyer has more information, the problem is known as “adverse selection.” 5. Firms can raise the financial capital they need in four main ways: (1) from early-stage investors; (2) by reinvesting profits; (3) by borrowing through banks or bonds; and (4) by selling stock.
Based on the graph showing a reduction in the growth of the money supply, as the economy moves from point D to point F, the trade-off between inflation and unemployment ______.
a. decreases slightly
b. increases slightly
c. holds steady
d. disappears