A shift from S1 to S2 reflects the change that happens when a negative externality is taken into account. A shift from D1 to D2 reflects the change that happens when a positive externality is taken into account.Refer to the above figures. A negative externality existed but has been corrected. Price and quantity will be
A. P1 and Q1.
B. P2 and Q2.
C. P3 and Q3.
D. P4 and Q4.
Answer: B
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Which of the following leads to the demanders paying all of a tax?
A) The supply is unit elastic. B) The supply is perfectly inelastic. C) The demand is perfectly elastic. D) The demand is perfectly inelastic.
Suppose a bank has $2 million in excess reserves and total reserves of $10 million. A required reserve ratio of 10% is applicable to all deposits at the bank. What is the total amount of deposits at the bank?
a. $100 million b. $8 million c. $800 million d. $80 million e. $10 million
The _______ model lays out the _______ available to the economy.
A) demand and supply; alternatives B) production possibilities; price alternatives C) production possibilities; alternatives D) demand and supply; prices
Two goods are substitutes when
A. an increase in the price of one reduces the demand for the other. B. the two goods have the same price. C. an increase in the price of one raises the demand for the other. D. the two goods are used together.