What concept does economics primarily deal with?
a) scarcity
b) poverty
c) change
d) power
Answer: a) scarcity
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If the Fed purchases securities in the amount of $100,000 from First Union Bank, then the
A) liabilities of First Union decrease by $100,000. B) assets of First Union Bank change in composition but not in amount. C) assets of the Fed decrease by $100,000. D) liabilities of the Fed change in composition but not in amount. E) assets of First Union Bank decrease by $100,000.
In order to be binding, a price ceiling
A) must be high enough for firms to earn a profit. B) must coincide with the free market equilibrium price. C) must lie below the free market equilibrium price. D) must lie above the free market equilibrium price.
The number of people willing to buy tickets to the Super Bowl is invariably greater than the number of tickets (and seats) available. This is evidence that the price of the tickets is
a. higher than the equilibrium price. b. equal to the equilibrium price since the number of tickets bought equals the number sold. c. lower than the equilibrium price. d. higher than the equilibrium price when the demand is inelastic but lower when the demand is elastic.
Countries that have high rates of savings also have
A) high rates of investment. B) low rates of investment. C) stock market bubbles. D) low rates of growth.