The demand for Chiquita bananas is more inelastic than the demand for fruit.
Answer the following statement true (T) or false (F)
False
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Jones is hungry, but is willing to postpone lunch as long as he can have a much larger meal at dinner. The compensation of the larger meal at dinner time suggests that Jones
A) is a glutton. B) acts irrationally because it is best to have three meals a day. C) has a positive rate of time preference with regard to today's meals. D) does not consider lunch to be a scarce good.
If a binding price floor were placed in the market in the graph shown:
A. quantity demanded would exceed quantity supplied.
B. quantity supplied would exceed quantity demanded.
C. the demand curve would have to shift.
D. the supply curve would have to shift.
The saying "the lower the price, the better" may not always be correct for an economy's public interest because
a. people should have to pay for what they want. b. people will overuse something they perceive as being cheaper than the utility they receive for it. c. the government can no longer afford to provide all the goods and services it provides because it is slowly going broke. d. cheaper prices will make people buy less of other things.
Suppose the government levies a corrective tax on firms that pollute in order to limit the quantity of pollution. Under this policy, does the demand curve for pollution rights determine the quantity of pollution, or does it determine the price of pollution?