Suppose you transfer $1,000 from your checking account to your savings account. How does this action affect the M1 and M2 money supplies?
A. M1 and M2 are both unchanged.
B. M1 falls by $1,000, and M2 rises by $1,000.
C. M1 is unchanged, and M2 rises by $1,000.
D. M1 falls by $1,000, and M2 is unchanged.
Answer: D
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Four friends decide to meet at a Chinese restaurant for dinner. They decide that each person will order an item off the menu, and they will share all dishes. They will split the cost of the final bill evenly among each of the people at the table. A Tragedy of the Commons problem is likely for each of the following reasons except
a. each person has an incentive to eat as fast as possible since their individual rate of consumption will not affect their individual cost. b. there is an externality associated with eating the food on the table. c. when one person eats, he may not take into account how his choice affects his friends. d. each dish would be both excludable and rival in consumption.
To practice long-run price discrimination, a monopolist must:
A. Be a natural monopoly B. Charge one price to all buyers C. Permit the resale of the product by the original buyers D. Be able to separate buyers into different markets with different price elasticities
The cost of risk is the amount by which expected wealth must increase to give the same ________ as a no-risk situation
A) marginal wealth B) marginal utility C) expected utility D) expected wealth
Government attempts to prohibit monopolization of a market are known as
a. antitrust regulation b. economic regulation c. social regulation d. anticompetitive regulation e. Herfindahl regulation