If the wages of loggers went up, the supply of logs would:
a. fall, thereby shifting to the right.
b. fall, thereby shifting to the left.
c. rise, thereby shifting to the right.
d. rise, thereby shifting to the left.
b. fall, thereby shifting to the left.
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If the Federal Reserve increases the money supply, ceteris paribus, the:
a. rate of interest decreases. b. rate of interest increases. c. rate of interest is unaffected. d. Fed sells bonds.
The benefits received principle would not work well in which of the following cases?
a. gasoline tax b. national defense c. taxing those people who use a private good d. admission fees to a national park
Which of the following is true of the production possibilities curve?
What will be an ideal response?
In a market system, how are the terms of exchange established?
a. Industry associations set up acceptable price ranges for their goods, and firms within each industry are required to set price within its relevant range. b. The forces underlying supply and demand interact to set a price c. Federal and state legislation establish minimum and maximum prices. d. Consumer advocacy groups establish fair prices for items, and most firms comply because they don’t want to anger their customers.