Suppose that the equilibrium price and quantity of new houses both increase. Which of the following could be a cause of this change?
A) The wage paid carpenters who build new houses might have risen.
B) A technological advance in framing a new house might have occurred.
C) The rent for nearby apartments might have fallen.
D) More home buyers might have moved into the area.
E) The cost of wood framing used to build houses might have fallen.
D
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When external benefits are present in a market,
a. less of the good will be produced than the amount consistent with economic efficiency. b. more of the good will be produced than the amount consistent with economic efficiency. c. the amount of the good produced will be equal to the amount consistent with economic efficiency. d. corresponding external costs are always generated.
When continued for several years, rapid growth in the money supply relative to the growth of real output will likely lead to an extended period of
a. low unemployment. b. high inflation. c. low nominal interest rates. d. high rates of real economic growth.
A shortage results from a current price being below the equilibrium price.
a. true b. false
The government's role in a developing country is important during the country's development process for all of the following reasons except
A. many social projects are associated with the free-rider problem, which minimizes the rate of return to the private sector. B. building infrastructure is a huge project that only the government can undertake. C. the government is the only institution with a vested interest in a country's development. D. building social overhead capital cannot successfully be taken on by the private sector.