Explain how both sales and long lines prior to store openings are characteristic of markets in disequilibrium
One function of sales is to reduce the price of products and bring markets with current excess supply into equilibrium. If the quantity of a product demanded exceeds the quantity supplied at the current market price, goods may be allocated to consumers on a first-come, first-served basis. Standing in line is one way to allocate goods, which also increases the opportunity cost of buying the goods.
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Congress and the president carry out fiscal policy through changes in
A) taxes and the interest rate. B) interest rates and the money supply. C) government purchases and the money supply. D) government purchases and taxes.
Transfer payments are important for society because
a. the government needs to perform acts of goodwill to maintain citizens' support b. we could not count GDP without them c. they serve to redistribute money from one group of citizens to another d. government investment is an important component of GDP e. they result in lower taxes for citizens
Explain what happens to the magnitude of price elasticity of demand as price increases along a straight-line demand curve
How the price of a depletable resource changes over time depends on
a. how the technology of resource extraction changes. b. the interest rate. c. how the technologies of production change in firms that use the resource. d. All of the above are correct.