Will depletable resources such as oil, coal, and aluminum be exhausted if their prices are left to the market?
What will be an ideal response?
No. As supplies decrease, price will rise. This will reduce quantity demanded, in line with the remaining, but more difficult to extract, supplies. For example, oil was depleted in the continental United States before turning to Alaska. Similarly, Britain only developed North Sea oil as the price rose.
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The slope
A) of a straight line is the same regardless of where on the line it is calculated. B) equals the change in the value of the variable measured on the vertical axis divided by the change in the variable measured along the horizontal axis. C) will be small if a large change in the variable measured on the vertical axis is associated with a small change in the variable measured along the horizontal axis. D) Answers A and B are correct. E) Answers A and C are correct.
When oligopolistic firms in an industry form a cartel, then it is most likely that
A) both industry output and prices will increase. B) both industry output and prices will decrease. C) industry output will increase while prices will decrease. D) industry output will decrease while prices will increase.
Name and describe two forms of market failure. Give an example of each.
What will be an ideal response?
Which of the following is an alternative measure of exchange rate proposed by The Economist magazine?
A) The midcap index B) The Consumer Price Index C) The Big Mac Index D) The GDP deflator