In the short run, an increase in market demand will usually lead to a(n)
a. decrease in price and an increase in quantity.
b. decrease in price and a decrease in quantity.
c. increase in price and an increase in quantity.
d. increase in price and a decrease in quantity.
c
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The ability to control a scarce resource or input is a characteristic of perfect competition.
Answer the following statement true (T) or false (F)
According to the quantity theory of money, if the long-run economic growth rate is 2.5%, by how much should the Fed increase the money supply if it wants inflation to be 2%?
A) 0.5% B) 1.25% C) 4.5% D) 5%
Government regulators know that pollution is a problem in Cleveland. However, information on the social cost of this externality is difficult to come by
Which of the following statements best describes how this information problem might manifest itself? a. Well-intentioned regulators monitor a handful of polluting factors and are unable to determine how much they contribute to the problem. b. Well-intentioned regulators decide to shut down the plants and start government production in state-of-the-art factories. c. Well-intentioned regulators impose a collective tax that ends up reducing output beyond the optimal level of output. d. Well-intentioned regulators fail to do anything because they are afraid of doing the wrong thing.
Which of the following best describes social costs?
a. The external costs borne by other members of society, ignoring the private costs to market participants. b. The sum of external costs and private costs. c. External costs minus private costs. d. Private costs minus external costs.