"Coffee Prices Sink As Demand Falls." The newspaper heading
A) assumes the law of demand does not hold.
B) confuses demand with quantity demanded.
C) misunderstands the role of supply in price formation.
D) reverses the actual relationship between price and demand.
E) uses the concept of demand correctly.
E
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Many economists believe that our price indexes ________ the true inflation rate
A) minimize B) overstate C) understate D) perfectly measure
In the Baumol model, the total quantity sold will usually be larger than
A) if perfect competition prevailed. B) if total costs were minimized. C) if profit were maximized. D) if companies were interdependent.
Refer to the above payoff matrix (in years of sentence) for two people (A and B) charged for robbery. Which of the following is the outcome of the dominant strategy without cooperation?
A) Both A and B confess. B) Both A and B do not confess. C) A confesses while B does not confess. D) A does not confess while B confesses.
The distribution of surplus received from a subsidy offered in a market where a positive externality is present depends on:
A. if those who are affected receive their true value of the externality. B. where the government gets the money to pay for the subsidy. C. how the subsidy is distributed among those affected by the externality. D. None of these statements is true.