For which of the following markets would the fallacy of composition least likely apply?
A. Poultry market
B. Labor market
C. Market for savings and investment
D. World market for oil
Answer: A
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At an interest rate of 5 percent, the present value of $1,000 to be received two years from today is
A) less than $875. B) between $875 and $925. C) between $925 and $975. D) more than $975.
When no one owns a particular resource
A) property rights are clearly defined. B) individuals have legal recourse for any damages caused to their resource. C) no one has any incentive to consider externality spillovers associated with that resource. D) positive externalities will arise.
Refer to the graphs shown. Assume the graph reflects demand in the automobile market. Which arrow best captures the impact of increased gasoline prices on the automobile market?
A. A B. B C. C D. D
Suppose the value of the price elasticity of demand is -3. What does this mean?
A) A 1 percent increase in the price of the good causes quantity demanded to increase by 3 percent. B) A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent. C) A 3 percent increase in the price of the good causes quantity demanded to decrease by 1 percent. D) A $1 increase in price causes quantity demanded to fall by 3 units.