Since price tends to equal total utility, the price of water is low and the price of diamonds is high.
Answer the following statement true (T) or false (F)
False
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Consumption spending is $4.5 billion, gross private domestic investment is $3 billion, and government expenditures are $2 billion. If GDP is $14 billion, which of the following could be true regarding exports and imports in the economy?
A) Exports are $9 billion, and imports are $6 billion. B) Exports are $15 billion, and imports are $10.5 billion. C) Exports are $6 billion, and imports are $8.5 billion. D) Exports are $4.5 billion, and imports are $2 billion.
Peak load pricing
A. is designed to move consumers up along their demand curve. B. is usually used when supply is very elastic. C. is designed to encourage more supply rather than to allocate a fixed supply. D. is designed to shift the demand curve of consumers to the left.
Assume the demand for automobile tires is highly inelastic and that the supply is highly elastic. The burden of a $2 excise tax on each tire will be:
A. borne by resource suppliers that provide the inputs for manufacturing tires. B. shared about equally by buyers and sellers of tires. C. borne primarily by buyers of tires. D. borne primarily by sellers of tires.
If banks do not have enough reserves to satisfy the reserve requirement, they can
A. Lend additional reserves in the federal funds market. B. Buy securities. C. Sell securities. D. Pay off discount loans at the Federal Reserve bank.