Refer to Figure 15-12. What is the amount of consumer surplus if, instead of monopoly, the industry was organized as a perfectly competitive industry?
A) $21 B) $124 C) $186 D) $332
D
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What does it mean for a good to be "nonexcludable"? Are private goods nonexcludable? Are public goods nonexcludable? Are common resources nonexcludable?
What will be an ideal response?
If fair insurance is offered to a risk-averse person, she will
A) buy enough insurance to eliminate all risk. B) not buy any insurance because it is overpriced. C) not buy any insurance since the marginal utility of the amount of the payment is positive. D) buy enough insurance to cover about half of the possible loss.
When the Fed sells government securities, it
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans b. raises the cost of borrowing from the Fed, discouraging banks from making loans c. increases the amount of excess reserves that banks hold, encouraging them to make loans d. increases the amount of excess reserves that banks hold, discouraging them from making loans e. decreases the amount of excess reserves that banks hold, discouraging them from making loans
Explain why the scarcity of resources causes people and nations to consider opportunity costs and trade-offs among choices. Give a personal example of an opportunity cost that you have faced and the impact of the decision you made.