People enjoy outdoor holiday lighting displays and would be willing to pay to see these displays but can't be made to pay. Because those who put up lights are unable to charge others to view them, they don't put up as many lights as people would
like. This is an example of a:
A. negative externality.
B. supply-side market failure.
C. demand-side market failure.
D. government failure.
Answer: C
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Suppose that a new seed technology improves corn yield by 20%. What is the market effect of that new technology?
A. A shift to the left of the supply curve that causes an increase in the price of corn. B. A shift to the left of the demand curve that causes a decrease in the price of corn. C. A shift to the right of the demand curve that causes an increase in the price of corn. D. A shift to the right of the supply curve that causes a decrease in the price of corn.
The nominal rate of interest is
A) the interest rate observed in today's market. B) the interest rate observed in the market minus the inflation premium. C) not influenced by inflation. D) a value that depends upon the stock market.