A fall in the value of the pound is likely to decrease spending on imports if:
Ans: The price elasticity of demand for imports is price elastic
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When interdiction efforts manage to stem the flow of illegal drugs into the United States, assuming no change in demand, the price of these substances rises. This price increase leads to more crime as addicts attempt to maintain their now more-expensive habits. Economists call this side-effect of the drug business
a. the illusion of rationality. b. an externality. c. the cost disease of personal services. d. inflation. e. unemployment.
Economists are particularly adept at understanding that people respond to
a. laws. b. incentives. c. punishments more than rewards. d. rewards more than punishments.
Refer to the information provided in Figure 2.6 below to answer the question(s) that follow.
Figure 2.6Refer to Figure 2.6. If the economy is at ppf2, a change in consumer taste would be shown by a
A. movement along ppf1. B. movement along ppf2. C. shift from ppf2 to ppf1. D. shift from ppf1 to ppf2.
Economic profits are:
A. Always larger than accounting profits B. The sum of accounting profits and implicit costs C. Equal to the difference between total revenues and implicit costs D. Equal to the difference between accounting profits and implicit costs