What has happened to resource prices in the twentieth century and what do they reveal about resource scarcity?
What will be an ideal response?
Figure 17-3 from the textbook provides data on lead, zinc, and copper prices. These data suggest that these resources are not generally becoming more scarce in this century. Baumol and Blinder suggest that this price pattern for resources stems from three things: (1) unexpected discoveries of reserves whose existence was not previously suspected; (2) the invention of new methods of mining or refining, which significantly reduced extraction costs; and (3) price controls, which held some prices down or decreased them below what the market would have paid
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The philosopher John Rawls argued that if people could make arrangements about how society would be organized before they were born that one of the principles that we would agree upon is that social and economic inequalities are to be arranged so
that they are to be of the greatest benefit to the least-advantaged members of society. What economic strategy sounds akin to this idea? Explain.
An insurance company holding a single-home mortgage should be most concerned about the mortgage's __________ risk
A) default B) prepayment C) price fluctuation D) collateral
Which of the following statements about economic models is TRUE?
A) A good economic model is complex. B) A good model does not rely on any assumptions. C) Every model is based on a set of assumptions. D) Economic models are designed to explain what people need.
The __________ tells us when the government raises taxes, the higher tax rate causes fewer units to be sold.
A. quantity effect B. price effect C. government spending effect D. quality effect