Answer the following statements true (T) or false (F)
1. Interest represents a cost to the borrower, but an income to the lender.
2. The demand curve for loanable funds illustrates the behavior of lenders or savers.
3. The quantity of loanable funds supplied is inversely related to the interest rate.
4. A decrease in the supply of loanable funds would tend to lower the interest rate.
5. If people became thriftier and saved more, the loanable funds theory predicts that the equilibrium interest rate would decrease.
1. TRUE
2. FALSE
3. FALSE
4. FALSE
5. TRUE
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The figure at right shows the demand and marginal cost curves for a monopoly. The deadweight loss of this monopoly equals
A. C
B. c+f.
C. h
D. c+d+e+f.
Which of the following cases can create a? free-rider problem? ?(Check all that apply.)
A. Opening a savings account in a bank. B. Use of a personal television by the owner. C. Use of public parks by locals. D. The street light on the road.