Refer to Common Property II. Suppose the common property becomes privately owned. If the owner charges a competitive entrance fee for the right to use the property, social gain will equal
The following questions refer to the accompanying diagram, which shows the benefits and costs associated with the use of a common property.
a. area C + D + F + G + I.
b. area F + G + H + I.
c. area A + B + C + D + F + G + I.
d. area A + B + C + D + E + F + G + H + I.
a. area C + D + F + G + I.
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Liquidity of an asset refers to:
a. its level of risk. b. whether it is held domestically or overseas. c. the ease with which it can be sold. d. its volatility.
Evaluate this statement: “If the economic profit is zero, a business will shut down.”
Please provide the best answer for the statement.
Fill in the blanks. For a normal good, the income effect is _________, and the substitution effect is _______.
a. positive; positive b. positive; negative c. negative; positive d. negative; negative