The fact that the demand for luxury cars is elastic is not surprising because
A. luxury cars are primarily a "status symbol."
B. the supply of luxury cars is inelastic.
C. luxury cars are relatively expensive.
D. there are few substitutes for true luxury cars.
Answer: C
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When interest rates in the U.S. decline, we can expect capital:
A. inflows and outflows to decrease. B. inflows and outflows to increase. C. inflow to decrease, and outflow to increase. D. outflow to decrease, and inflow to increase.
Which of the following is not one of the three core economic issues that must be resolved?
A. Who should get the goods and services we produce. B. What to produce with limited resources. C. How to produce the goods and services we select. D. What to produce with unlimited resources.
Which of the following statements about pollution or pollution control is TRUE?
A) A nationwide uniform tax on emissions is the appropriate way to reduce pollution levels. B) A tax to reduce pollution levels should be based on the economic damages rather than on the absolute amount of pollution. C) Private costs of pollution usually exceed social costs. D) The optimum amount of pollution abatement is where the total benefits of pollution abatement equal the total costs of pollution abatement.
Economic efficiency requires that a natural monopoly's price be
A) equal to average total cost where it intersects the demand curve. B) equal to marginal cost where it intersects the demand curve. C) equal to average variable cost where it intersects the demand curve. D) equal to the lowest price the firm can charge and still make a normal profit.