People who live in apartment buildings across from a football stadium are able to watch football games from the balconies of their apartments instead of paying for tickets to sit inside the stadium. For these free riders, the football games are

Figure 7.1   Angus and Dudley are neighbors. Angus loves to play the bagpipes and earns a living recording his bagpipe music for use as background music in the movies. If Angus does not earn a living playing bagpipes, his only other talent is mopping floors. Dudley is a linguist whose clients are actors wishing to perfect accents for upcoming roles. When Angus plays his bagpipes, Dudley and his clients have trouble listening to each other, and this has severely affected Dudley’s business. Presently, there is no city ordinance against playing loud music. The payoff matrix showing the daily payoffs to each player is shown above.Refer to Figure 7.1. Suppose that instead of $350, Angus earns only $250 by playing the bagpipes, but all other earnings remain the same. The Coase theorem predicts that Angus ________ play the bagpipes with no city ordinance banning loud music, and Angus ________ play the bagpipes if the city passes an ordinance banning loud music.

If the prices of goods and services were expressed in terms of coconuts, then coconuts would be serving as a

By acting as a lender of last resort during a bank panic, the Federal Reserve enables banks to

When Starbucks accepts your $10 bill for two grande lattes and one tall caramel macchiato, the $10 bill serves as a

________ are financial assets that represent partial ownership of a corporation.

Which of the following functions of money would prove rather useless if inflation were extremely high?

The amount by which the federal government’s annual expenditures exceed its annual receipts is the

The Fed can attempt to decrease the federal funds rate by

Table 18.1   Currency     $500 Checking account balances     $550 Savings account balances $3,500 Money market mutual fund balances     $300 Small certificates of deposit     $250 Consider the information above for a small economy. Assume there are no traveler’s checks.Refer to Table 18.1. M1 in this simple economy equals