Every economy must ration goods in some way because of
a. overpopulation.
b. poorly-performing markets.
c. the income gap between rich and poor.
d. scarcity.
Answer: d. scarcity.
You might also like to view...
If the Federal Reserve announces that its target for the federal funds rate is rising from 4 percent to 4.25 percent, how do you expect workers and firms to react?
A) If the Fed's announcement is not credible, workers and firms will not expect inflation to fall so they will reduce their consumption and investment spending, which will increase aggregate demand and reduce inflation. B) As long as the Fed's announcement is credible, workers and firms will reduce their consumption and investment spending, which will reduce aggregate demand and reduce inflation. C) As long as the Fed's announcement is credible, workers and firms will increase their consumption and investment spending, which will increase aggregate demand and inflation. D) Workers and firms will incorporate the increase in interest rates into their expectations of inflation, and they will expect inflation to rise as a result of Fed's policy announcement.
There is an increase in the demand for cream when the price of coffee falls. Other things constant, we can conclude that coffee and cream are
A) substitute goods. B) inferior goods. C) independent goods. D) complementary goods.
Suppose a consumer's expected utility function given two possible states of nature A and B can be expressed in terms of consumption of food, F, in both states as U(FA, FB) = [0.6 × ln(FA)] + [0.4 × ln(FB)]. For this utility function, MUA is (0.6/FA) and MUB is (0.4/FB). Without insurance, the consumer can consume 200 in state A but only 50 in state B. The consumer can purchase insurance at a premium of 50 cents per dollar of benefit. What is the value of the insurance she purchases
A. $4.74 B. $4.85 C. $12.67 D. $114.87
The following question relate to a community that is circular in nature with a one mile circumference. There are 81 people evenly distributed around the lake where the town is built. The travel cost is $10 per mile, a restaurant costs $100 to set up, and the cost per meal is $2. If the town projected a total population of 180 by the end of the decade, how many restaurants would the city planners project as optimal for the end of the decade? Round off small residuals to the nearest whole number.
What will be an ideal response?