Other things equal, if the price of a key resource used to produce product X falls, the:
A. product supply curve of X will shift to the left.
B. product demand curve of X will shift to the left.
C. product demand curve of X will shift to the right.
D. product supply curve of X will shift to the right.
Answer: D
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The law of demand implies that, other things remaining the same
A) as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will increase. B) as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will decrease. C) as income increases, the quantity of cheeseburgers demanded will increase. D) as the demand for cheeseburgers increases, the price of a cheeseburger will fall.
An example of moral hazard is
a. workers shirking when the boss is not looking b. health care insured dieting and exercising c. drivers of safer cars turning their phones off before driving d. borrowers investing their loan proceeds exactly as the bank requires
Donna runs an inn and charges $300 a night for a room, which equals her cost. Sam, Harry, and Bill are three potential customers willing to pay $500, $325, and $250, respectively. When the government levies a tax on innkeepers of $50 per night of occupancy, Donna raises her price to $350. The deadweight loss of the tax is
a. $150 b. $100 c. $50 d. $25
With a natural monopoly, the fair return price:
A. Is allocatively efficient; the socially optimal price is allocatively inefficient B. Is allocatively inefficient; the socially optimal price is allocatively efficient C. And the socially optimal price are both allocatively inefficient D. And the socially optimal price are both allocatively efficient