If there is a shortage at a given price, then
A. That price is less than the equilibrium price.
B. That price is greater than the equilibrium price.
C. That price is the equilibrium price.
D. There is no equilibrium price in the market.
Answer: A
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The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product
Indicate whether the statement is true or false
A network effect arises whenever
A) firms in an oligopolistic industry engage in limit pricing. B) firms in an oligopolistic industry engage in a zero-sum game. C) a consumer's willingness to purchase a good or service is influenced by how many others also buy or have bought the item. D) a producer's willingness to produce a good or service is influenced by how many other firms also produce or have produced the item.
The government prefers a market-based approach to reduce firms’ emissions of a toxic gas but wants to make certain that no more than 1,000 cubic yards of the gas are ever emitted in a single day. The most efficient policy under these circumstances is likely to be a system of
A. per-unit taxes on emissions of the gas. B. per-unit taxes on the goods produced by firms that emit the gas. C. subsidies to firms that agree not to emit the gas. D. sales of permits to emit specified quantities of the gas on specified days.
?Hair Pins /hourBandanas /hourNigel410Mia93
Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 18.3. Which of the following is TRUE?
A. Nigel has an absolute advantage in producing hair pins but not bandanas. B. Nigel has an absolute advantage in producing bandanas but not hair pins. C. Nigel has an absolute advantage in producing both goods. D. Nigel does not have an absolute advantage in producing either good.