The use of abstraction in economics is analogous to the use of a road map providing directions to a location.
Answer the following statement true (T) or false (F)
True
You might also like to view...
The demand for money that arises because holding money over short periods is less risky than holding stocks or bonds is called the
A) transactions demand for money. B) opportunity cost demand for money. C) liquidity demand for money. D) speculative demand for money.
Having seen the quantity of drugs supplied by pharmaceutical companies in a competitive market, a government decides to force companies to sell exactly the same quantity of drugs at prevailing market prices
The government then forbids additional drug sales and allows doctors to prescribe the drugs at no cost to patients in need. This government scheme is A) efficient as the quantity of drugs traded is the same as under a free market. B) efficient as the price of drugs paid by the government is the same as under a free market. C) efficient as consumer surplus is maximized. D) likely to be inefficient as doctors are unlikely to prescribe drugs to the consumers who are willing to pay the most for the drugs. E) likely to be inefficient as drug producers have a captive buyer.
Which of the following will cause demand to be relatively elastic?
a. There are few substitutes b. The time interval is relatively long c. The good is considered a necessity d. The good involves a relatively small portion of the consumers' budget e. The time interval is relatively short
What type of industry is the market for grocery products? Is over-capacity present?