Legalizing all forms of illegal activities
A) reduces GDP and reduces the size of the underground economy.
B) reduces GDP and increases the size of the underground economy.
C) increases GDP and reduces the size of the underground economy.
D) increases GDP and increases the size of the underground economy.
Answer: C
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Any attempt to capture a consumer surplus, a producer surplus, or an economic profit is called
A) profit-maximizing. B) rent-seeking. C) price discriminating. D) efficiency gain.
Why is the supply of oil more price elastic in the long run?
A) New deposits are found. B) Better extraction technology is developed. C) Firms have the ability to change the amount of all inputs. D) All of the above.
The steel industry is an example of a homogeneous oligopoly.
Answer the following statement true (T) or false (F)
The income elasticity of demand helps determine, empirically, whether a good is
A. normal or inferior. B. a necessity or a luxury. C. unit elastic or perfectly inelastic in its own demand. D. a complement or a substitute to another good.