To an economist, scarcity means that:
a. it is very time-consuming to find a good.
b. at a zero price, the available quantity of a good is insufficient to meet people's wants.
c. a good is unavailable even at very high prices.
d. at the current market price, the amount available is less than the amount that people want and are willing to pay for.
e. resources are unlimited but people's desires are limited.
b
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Investment spending increases during ________, and decreases during ________
A) a deflation; an inflation B) a recession; an expansion C) an expansion; a recession D) a recession; a depression
Instituting a rent control program will most likely lead to
A) a shortage of rental units. B) overly elaborate and expensive construction. C) an efficient allocation of existing units among consumers. D) an excess quantity supplied of rental units.
The Congressional Budget Office and the Office of Management and Budget each produce deficit forecasts for a fiscal year. They use models that are mostly similar but have notable differences. As such, the disagreements are likely usually over
a. normative issues b. positive issues c. the mathematical calculations in an economic model d. whether microeconomics or macroeconomics is more important e. whether economic theory is useful in explaining the behavior of actors in the economy
A sporting goods store observes that as they reduce the price of squash balls from $5 to $4, their quantity demanded rises from 200 to 220. Rounding to the nearest tenth, they correctly compute the elasticity of demand of squash balls to be:
A. 2.3. B. 5. C. 0.4. D. 0.1.