What are the two key factors that determine the strength of demand? How do they determine whether a good is in high demand or low demand?
What will be an ideal response?
The two key determinants of the strength of demand are the productivity of a resource to produce a good or service and the market value of the good or service it helps produce.
These factors help determine the level of demand in that a resource that is highly productive and whose end product has a high market value will have a high demand. A resource that faces low productivity and whose end product faces a low market value will have low demand.
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If there is a surplus of tacos, then the
A) quantity of tacos demanded equals the quantity of tacos supplied. B) quantity of tacos demanded is greater than the quantity of tacos supplied. C) quantity of tacos demanded is less than the quantity of tacos supplied. D) market is at equilibrium. E) supply curve of tacos will shift leftward to eliminate the surplus.
An investment opportunity has two possible outcomes, and the value of the investment opportunity is $250. One outcome yields a $100 payoff and has a probability of 0.25. What is the probability of the other outcome?
A) 0 B) 0.25 C) 0.5 D) 0.75 E) 1.0
Government failure refers to
a. a mismatch between employer incentives and firm objectives b. the failure of government to provide an efficient quantity of public goods c. the inability of firms to produce output efficiently d. the overabundance of competitors with government in production e. the under-allocation of tax revenues
Which of the following statements accurately describes the situation when 1 euro is valued at $2?
a. 2 euros can be exchanged for $1. b. $1 can be exchanged for 0.50 euro. c. 1 euro can be exchanged for $0.50. d. $1 can be exchanged for 1 euro.