Which good would you expect to have a greater price elasticity: a gallon of gasoline sold at a specific gasoline station on Main Street in Phoenix, a gallon of gasoline sold in Phoenix, or a gallon of gasoline sold in Arizona? Why?
What will be an ideal response?
A gallon of gasoline sold at a specific station on Main Street in Phoenix, because there are more substitutes for that good than the others.
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A price ceiling in the market for gasoline that is below the equilibrium price will lead to
A) the quantity demanded of gasoline exceeding the quantity supplied. B) an increase in the demand for gasoline. C) a decrease in the supply of gasoline. D) the quantity supplied of gasoline exceeding the quantity demanded. E) no change in the market since the price ceiling is below the equilibrium price.
When trade is possible, each country can produce the goods that it has:
A. a comparative advantage at producing, rather than the exact combination of goods its consumers want. B. an absolute advantage at producing, rather than the exact combination of goods its consumers want. C. an absolute advantage at producing, rather than the goods it has a comparative advantage in. D. a comparative advantage at producing, rather than the exact combination of goods its producers want.
Which of the following explains why pork-barrel spending is often approved, even when the spending is inefficient?
What will be an ideal response?
An entrepreneur is:
A. an employee in a factory. B. the manager of a factory. C. the person who conceives and starts a business. D. the person who does not assume any risk in business.