When households and firms sell financial assets, such as government securities, the
A) market price of the securities increases.
B) nominal interest rate falls.
C) supply of money curve shifts leftward.
D) demand for money curve shifts leftward.
E) nominal interest rate rises.
E
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A tax
A) places a wedge between the price paid by the buyers and the price received by the sellers. B) reduces consumer surplus and producer surplus. C) decreases government spending. D) Both answers A and B are correct. E) None of the above answers is correct.
Waybelow Normal University has found it necessary to institute a crime-control program on its campus to deal with the high costs of theft and vandalism. The university is now considering several alternative levels of crime control. This table shows the expected annual costs and benefits of these alternatives. Total Costs Per YearTotal Benefits Per Year (Reduction in the Costs of Crime)Level One - 1 Security Officer$20,000$80,000Level Two - 1 Security Officer with Guard Dog30,000120,000Level Three - 1 Security Officer with Guard Dog and Patrol Car40,000140,000Level Four - 2 Security Officers with Guard Dog50,000155,000Level Five - 2 Security Officers with Guard Dog and Patrol Car60,000160,000Refer to the above information. If Waybelow undertakes Level Three:
A. there would be an overallocation of resources to crime control. B. marginal costs will exceed marginal benefits. C. total benefits will be less than total costs. D. there would be an underallocation of resources to crime control.
Suppose n identical Cournot firms purchase labor in a competitive labor market. How is the market demand for labor affected by the number of firms in the market?
What will be an ideal response?
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow.
Figure 6.1Refer to Figure 6.1. AC represents Tom's budget constraint. Point D then represents a point that is
A. not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income. B. an available option, as Tom is just spending all of his income. C. available, but at which he does not spend all his income. D. in his opportunity set but not on his budget constraint.