On holiday weekends thousands of people picnic in state parks. Some picnic areas become so overcrowded the benefit or value of picnicking diminishes to zero. Suppose that the Minnesota State Park Service institutes a variable fee structure. On weekdays when the picnic areas get little use, the fee is zero. On normal weekends, the fee is $8 per person. On holiday weekends, the fee is $14 per
person. The fee system corrects a problem known as the
a. Coase theorem.
b. free rider problem.
c. Tragedy of the Commons.
d. public goods problem.
c
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Assume you have a credit card balance of $2,000 at 15 percent and the inflation rate is 3 percent. What are the nominal and real interest rates?
A) 15 percent nominal and 12 percent real B) 12 percent nominal and 15 percent real C) 15 percent nominal and 3 percent real D) 3 percent nominal and 12 percent real E) 15 percent nominal and 18 percent real
The price of beef increased by 20 percent and the quantity supplied increased by 10 percent. The supply of beef is
A) elastic. B) perfectly elastic. C) perfectly inelastic. D) inelastic. E) unit elastic.
The downward slope of the demand for money curve reflects the fact that
A) people hold more of their wealth in the form of money as the price level rises. B) people hold more of their wealth in the form of money as the price level falls. C) people hold more of their wealth in the form of money as the interest rate rises. D) people hold more of their wealth in the form of money as the interest rate falls.
A government that uses a bureau rather than a private firm to provide some good or service
a. may have less opportunity for officials and legislators to reward friends and supporters with jobs b. will always incur higher costs of production c. will lose the ability to make decisions via the hierarchy of the market d. may be better able to control details of production e. will not be able to sell the good or service after it is produced