The graph below represents a competitive market for a product where the government has set a price ceiling of 0A. What quantity will buyers be able to buy after the imposition of the price ceiling?
A. 0J
B. 0L
C. JL
D. KL
A. 0J
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A rise in the price of good A shifts the ________ good B rightward if the cross elasticity of demand between A and B is ________
A) demand curve for; negative B) demand curve for; positive C) supply curve of; negative D) supply curve of; positive
Suppose the U.S. Congress is successful in enacting tariffs large enough to eliminate the current account deficit. What would happen to the level of domestic investment?
A) It would not change. B) It would fall to a level equal to national saving. C) It would rise and exceed national saving. D) It would rise to a level equal to net foreign investment.
You are the manager of a popular shoe company. You know that the advertising elasticity of demand for your product is 0.15. How much will you have to increase advertising in order to increase demand by 10 percent?
A. 38.6 percent B. 66.7 percent C. 4.3 percent D. 0.02 percent
When private and social costs are equal,
A. Government failure occurs. B. There is no opportunity cost. C. Market failure occurs. D. There are no external costs.