When a shortage of a goods leads to a price increase, its price usually rises because
A) Americans are committed to capitalism.
B) most people are better off if it does.
C) sellers can benefit by raising their prices.
D) higher prices lead to scarce goods being allocated most efficiently.
C
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Producer surplus definitely exists when the
A) price exceeds marginal benefit. B) price exceeds marginal cost. C) marginal cost exceeds the price. D) marginal benefit exceeds the price. E) marginal benefit exceeds the marginal cost.
Assume the United States and Australia have the same amount of resources. In a given time period, the United States can produce 2 tons of beef or 200,000 cars. Australia can produce 1 ton of beef or 100,000 cars. This means that
A. Australia has an absolute advantage in both beef and cars. B. Australia has a comparative advantage in cars. C. The United States has an absolute advantage in both beef and cars. D. The United States has a comparative advantage in beef.
Quantity demanded is affected not just by price but by other variables, such as income and the prices of other goods.
Answer the following statement true (T) or false (F)
Economists James Buchanan and Gordon Tullock are well-known for developing
A) the concept of government failure. B) the voting paradox. C) the impossibility theorem. D) the public choice model.