Which good would you expect to have a greater price elasticity: a gallon of gasoline sold at a specific gasoline station on Main Street in Phoenix, a gallon of gasoline sold in Phoenix, or a gallon of gasoline sold in Arizona? Why?
What will be an ideal response?
A gallon of gasoline sold at a specific station on Main Street in Phoenix, because there are more substitutes for that good than the others.
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The 2001 recession was caused principally by
A) a slowing in the growth of the money supply. B) a drop in autonomous consumption spending. C) a decrease in government spending. D) a drop in real business investment.
The legal system based on common law derives from the experience of which country?
A) France B) England C) Germany D) Rome
Over a ten year period, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?
a. An increase in consumer income over this ten year period b. A reduction in the price of residential phone service, a substitute for cellular phone service c. An increase in the wages of workers in the cellular phone industry d. Technological improvements that reduced the cost of supplying cellular phone service
As the size of a tax rises, the deadweight loss
a. rises, and tax revenue first rises, then falls. b. rises as does tax revenue. c. falls, and tax revenue first rises, then falls. d. falls as does tax revenue.