Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.
Figure 9.2Refer to Figure 9.2. Suppose demand for wheat is initially D2. If consumer incomes increase, then demand for wheat will shift to ________. This will ________ the equilibrium price of wheat, and individual profit-maximizing firms will produce ________ bushels of wheat.
A. D3; decrease; 7
B. D1; decrease; 0
C. D3; increase; 15
D. D1; increase; 10
Answer: C
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Which of the following statements is false?
A. Externalities can sometimes be internalized through individual voluntary agreements. B. It would be a relatively easy matter to establish property rights in the air. C. Persuasion can be used in some cases to internalize externalities. D. Taxes and subsidies are sometimes used as corrective devices for market failures.
Critics of Fed independence argue that
A. monetary policy and fiscal policy are necessarily inconsistent. B. political control ensures low rates of inflation. C. monetary policy run by specialists is inherently inflationary. D. unelected officials are undemocratic.
Under a gold standard, if the U.S. has a trade deficit with Japan,
A. the U.S. would receive gold from Japan, the Japanese money supply would decline, and the price level would fall in Japan. B. the U.S. would receive gold from Japan, the U.S. money supply would increase, and the U.S. price level would rise. C. the U.S. would lose gold to Japan, the U.S. money supply would increase, and the price level in the U.S. would increase. D. the U.S. would lose gold to Japan, the U.S. money supply would decline, and the U.S. price level would fall.
We would not consider ________ an act of capital investment.
A. a florist delivering roses on Valentine's Day B. a company purchasing solar panels for its headquarters C. a son paying for his mother to go back to college D. a city government building a new fire station