If the Fed buys government bonds through open-market operations, it will
A) increase the demand for bonds in the bond market.
B) decrease the demand for bonds in the bond market.
C) increase the supply of bonds in the bond market.
D) decrease the supply of bonds in the bond market.
Ans: A) increase the demand for bonds in the bond market.
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Medical research helps to develop better treatments for neuromuscular disease. Medical researchers are constantly in search of funds. Many in the public, however, are unwilling to contribute money toward neuromuscular disease research until a member of their own family suffers from a neuromuscular ailment. If left strictly to the private market, it is likely that there will be: a. an
overallocation of resources to neuromuscular disease research, relative to the efficient level. b. an underallocation of resources to neuromuscular disease research, relative to the efficient level. c. an efficient quantity of resources devoted to neuromuscular disease research. d. an efficient quantity of resources devoted to neuromuscular disease research.
Suppose Katie, Kendra, and Kristen each purchase a particular type of cell phone at a price of $80 . Katie's willingness to pay was $100, Kendra's willingness to pay was $95, and Kristen's willingness to pay was $80 . Consumer surplus for the three individuals is
a. $15. b. $20. c. $35. d. $80.