If the U.S. government increases spending, the U.S. Treasury
a. has the legal right to issue currency to pay for the spending.
b. does not have the legal right to issue currency to pay for the spending.
c. usually pays for the spending by selling bonds directly to the Fed.
d. seldom pays for the spending by selling bonds to the public.
b. does not have the legal right to issue currency to pay for the spending.
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A seller who succeeds in getting his various customers to pay different prices for the same good
A) is keeping his marginal revenue closer to his demand curve than it would otherwise be. B) is not using the marginal cost-marginal revenue formula to set prices. C) must be paying attention to overhead or sunk costs in setting prices. D) thereby misallocates resources because sales will be less than if a single price is charged.
The Coase theorem states that if transaction costs are low, the number of parties is small, and property rights are well established
A) the government must intervene to eliminate any externalities in the market. B) private transactions are efficient. C) there will be no pollution. D) Both answers B and C are correct.
Suppose Jack Weldon came up with a novel idea of making lamps out of recycled automobile tires. His firm, No-Skid Lamps, works three shifts a day trying to keep up with demand. Attracted by its success, other firms copy the idea and produce similar lamps. As a result, No-Skid Lamps' demand curve
a. shifts to the right and becomes more inelastic b. shifts to the right and becomes more elastic c. shifts to the left and becomes more inelastic d. shifts to the left and becomes more elastic e. stays the same
Which of the following statements is false?
A. Critics feel that wage and price controls interfere with the price mechanism. B. Sweden has one of the world's most equal distributions of income, but also has a relatively low standard of living. C. In the former Soviet Union, most of the crops were produced on collective farms. D. The price system is based on supply and demand.