What is the difference between scarcity and poverty?
What will be an ideal response?
Scarcity exists when availability is less than people want. Poverty exists when availability is less than people need. Everyone suffers scarcity; only an unfortunate minority suffers poverty.
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All else held equal, economists would prefer a tariff over an import quota because
A. domestic producers can charge higher prices with a tariff than with an import quota. B. compared with an import quota, a tariff enables consumers to pay lower prices. C. a tariff enables the government to collect revenue, whereas an import quota does not. D. a tariff allows the market to adjust import quantities if domestic supply, domestic demand, or world price changes.
An increase in the marginal cost arising from a more complex specialized investment environment will cause the optimal contract length to:
A. increase. B. decrease. C. either increase or decrease. D. remain constant.
Which of the following may shift the labor demand curve?
A. more people entering the labor force B. a decrease in the value of leisure C. an increase in the value of leisure D. an increase in the value of output that firms produce
The largest liability of the Fed from those on this list is
A. loans to depository institutions. B. mortgage-backed securities. C. U.S. Treasury securities. D. currency outstanding.