The rationing function of prices refers to
A) the situation when government must intervene in a market when there is a large shortage or surplus.
B) the synchronization of decisions by buyers and sellers that leads to an equilibrium.
C) the synchronization of decisions by buyers and sellers through the direction of government agencies.
D) the situation when only the rich get the goods they want.
B
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Emissions permits allow polluters to pay for the right to pollute a specified amount.
Answer the following statement true (T) or false (F)
If the price level rose in three consecutive years from 100 to 120 to 140, then the annual inflation rate over those years would
A) decrease. B) remain the same. C) equal 20%. D) increase.
A perfectly competitive firm may earn economic profits in
a. only the short run. b. only the long run. c. the short run and the long run. d. neither the short run nor the long run.
You hold bonds issued by the city of Sacramento, California. The interest you earn each year on these bonds
a. is not subject to federal income tax and so these bonds pay a higher interest rate than otherwise comparable bonds issued by the U.S. government. b. is not subject to federal income tax and so these bonds pay a lower interest rate than otherwise comparable bonds issued by the U.S. government. c. is subject to federal income tax and so these bonds pay a higher interest rate than otherwise comparable bonds issued by the U.S. government. d. is subject to federal income tax and so these bonds pay a lower interest rate than otherwise comparable bonds issued by the U.S. government.