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Unformatted text preview: c. The marginal cost of maintaining the parks at this flow of visits is greater than the marginal benefit received by the National Park Service in its entry fee. d. Both a and b e. Both b and c 26. When the greens fee (the price for playing a round of golf) increases, the demand for golf clubs ______________. This is because greens fees and golf clubs are _______________________. a. rises, complements b. rises, substitutes c. falls, complements d. falls, substitutes e. none of the above 27. When Egypt provided a subsidy to the price of bread in 2007, the government held the price of bread for consumers below the marginal cost to bakeries of producing the bread. It paid the subsidy to producers to cover their losses. Why was this inefficient? a. There was too much bread – no one wanted it at that price. b. There was too little bread – producers weren’t willing to produce at that price. c. There was deadweight loss from too much consumption. d. All of the above. e. None of the above. Midterm One, Economics 101.007, Fall 2011 7 28. You’ve begun a bagel‐baking business with three friends (Moe, Larry and Curly). There are two activities involved: baking the bagels and selling the bagels in the P...
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- Spring '09