There are very few, if any, good substitutes for motor oil. What does this imply?
a) The supply of motor oil would tend to be price elastic.
b) The demand for motor oil would tend to be price elastic.
c) The demand for motor oil would tend to be price inelastic.
d) The demand for motor oil would tend to be income elastic.
Ans: c) The demand for motor oil would tend to be price inelastic.
You might also like to view...
Describe the consequences of estimating an equation by OLS in the presence of an endogenous regressor. How can you overcome these obstacles? Present an alternative estimator and state its properties
What will be an ideal response?
Private ownership and competitive markets are important for economic growth because they provide individuals with a strong incentive to:
a. care for resources and use them beneficially. b. innovate and introduce new products that are highly valued relative to their cost. c. produce goods efficiently. d. all of the above are correct.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2. B. P1 and Y2. C. P4 and Y2. D. P1 and Y1.
Buffalo in the United States almost became extinct while cattle, an animal that provides similar products, never has been close to extinction. The difference is due to
A. cattle existing in Europe also while buffalo were specific to North America. B. the use of private property rights on cattle and common property rights on buffalo. C. the greater marginal value of a head of cattle relative to buffalo, leading to over-hunting of buffalo. D. the greater marginal value of a buffalo relative to a steer, leading to the overharvesting of buffalo.