One common definition of economics is the study of
A. how scarcity increases opportunities to meet ends.
B. how markets overcome scarcity.
C. one goal and three tasks.
D. how to use limited means to meet unlimited wants.
E. wants versus needs.
Answer: D
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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.
When the price level falls, the total quantities of goods and services demanded:
a. decreases. b. stays the same. c. increases. d. increases and then decreases. e. decreases and then increases.
The free-rider problem
a. forces the supply of a public good to exceed its demand. b. results in common resources becoming club goods. c. explains why many local governments supply public goods. d. results in public goods becoming private goods.
The optimal bid for an individual participating in a first-price, sealed-bid auction with independent private values is to bid:
A. less than the individual's valuation of the item. B. There is not an optimal bid strategy for all individuals when independent private values exist. C. exactly the individual's valuation of the item. D. more than the individual's valuation of the item.