Which of the following are TRUE of fixed payment loans?
A) The borrower repays both the principal and interest at the maturity date.
B) Installment loans and mortgages are frequently of the fixed payment type.
C) The borrower pays interest periodically and the principal at the maturity date.
D) Commercial loans to businesses are often of this type.
B
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Refer to Figure 5-5. Suppose the current market equilibrium output of Q1 is not the economically efficient output because of an externality. The economically efficient output is Q2. In that case, diagram shows
A) the effect of an excess demand in a market. B) the effect of a subsidy granted to producers of a good. C) the effect of a positive externality in the consumption of a good. D) the effect of a negative externality in the consumption of a good.
With regard to the Constitution and its interpretation,
(a) the powers reserved for the states included the police powers—local rules, laws and ordinances, including licensing, inspection and the regulation of local business activities. (b) the "common law of England" was in effect, claimed as the right of all Americans and still enforced by England. (c) England was consulted in cases of ambiguity over interpretation of the common law policy. (d) none of the above are true.
The government imposes a tax on an industry that produces goods creating a negative externality. Yet the industry produces more than the optimum quantity of output. This means
A) the tax is more than the external cost associated with the product. B) the tax is less than the external cost associated with the product. C) the company should advertise the product more. D) the company should increase the production of the product.
Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of an increase in the price of a complement for a good?
A. Figure 1 B. Figure 2 C. Figure 3 D. Figure 4