Market supply is obtained by
A. summing the amount demanded by individual consumers at various prices.
B. summing the amount supplied by individual producers at various prices.
C. observing how the supply curve shifts.
D. the law of supply.
Answer: B
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The above figure shows the U.S. market for 1 carat diamonds. With free trade, the price in the United States for diamonds is equal to ________ and with the quota illustrated in the figure, the price in the United States is equal to ________
A) $4,000; $2,000 B) $2,000; $3,000 C) $4,000; $3,000 D) $2,000; $2,000 E) $2,000; $4,000
If demand is perfectly inelastic, the absolute value of the price elasticity of demand is
A) more than one. B) less than one. C) zero. D) equal to the absolute value of the slope of the demand curve.
One advantage of a consumption tax is that there are fewer problems with inflation.
A. True B. False C. Uncertain
The underground economy—the informal sector—can be a significant drag on the economies of developing countries. Why are firms in the informal sector often less efficient than firms in the formal sector?
What will be an ideal response?