Microeconomics is concerned with
A. the aggregate or total levels of income, employment, and output.
B. a detailed examination of specific economic units that make up the economic system.
C. the establishing of an overall view of the operation of the aggregate economic system.
D. how government debt affects aggregate economic activity.
Answer: B
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Depositors have a strong incentive to show up first to withdraw their funds during a bank crisis because banks operate on a
A) last-in, first-out constraint. B) sequential service constraint. C) double-coincidence of wants constraint. D) everyone-shares-equally constraint.
A rain barrel is a container that captures and stores rainwater for landscape and garden use during dry periods. Rain barrels provide an external benefit to the community through water conservation. If the government offers a per unit subsidy on rain barrels equal to the per-unit externality, then
a. the after-subsidy equilibrium quantity of rain barrels will be less than the socially optimal quantity of rain barrels. b. the after-subsidy equilibrium quantity of rain barrels will be more than the socially optimal quantity of rain barrels. c. the after-subsidy equilibrium quantity of rain barrels will equal the socially optimal quantity of rain barrels. d. market incentives will be distorted and move the allocation of resources away from the social optimum.