Anna is expecting a child but has decided that she is not ready to be a mother. She chooses to sell her newborn to Bob and Sue, a couple who have been unable to conceive a child of their own but want one desperately. This is an example of a trade that:
A. should be permitted as long as each party enters into the agreement voluntarily.
B. may benefit each party but may not be permitted in a society that believes selling babies is morally wrong.
C. would never be permitted in any society.
D. may benefit each party but cannot be considered efficient.
Answer: B
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Assume the income elasticity of a good has been calculated to be +0.83. Based on this information, we can infer that the good is:
A) a normal good and a luxury. B) an inferior good and a necessity. C) a normal good and a necessity. D) an inferior good and a luxury.
In the simple linear regression model, the regression slope
A) indicates by how many percent Y increases, given a one percent increase in X. B) when multiplied with the explanatory variable will give you the predicted Y. C) indicates by how many units Y increases, given a one unit increase in X. D) represents the elasticity of Y on X.
If a central bank increases the money supply in response to an adverse supply shock, then which of the following quantities moves closer to its pre-shock value as a result?
a. both the price level and output b. the price level but not output c. output but not the price level d. neither output nor the price level
Bank of the Gulf has a required reserve ratio of 10 percent. It receives $180,000 in new deposits and then loans the excess reserves from this deposit to Kayla, who is building a new greenhouse. Kayla deposits the money into her checking account at Vulcan Bank until she needs it. How much money has Bank of the Gulf created?
a. $162,000 b. $18,000 c. $324,000 d. $180,000