Economists have found that the price elasticity of demand for water is higher in the summer than in the winter. Why is this likely to be so?
A. Winter water use tends to be for necessities such as cleaning and cooking, and summer water use tends to be for both necessities and non-necessities such as gardening and recreation.
B. Winter is longer than summer, and price elasticity is lower over longer time horizons.
C. Summer is longer than winter, and price elasticity is higher over longer time horizons.
D. People take more vacations in the summer and so use less water at home.
Answer: A
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The federal government pays airlines to service small cities in the United States through a subsidy program called Essential Air Service which was established in 1978 when the airline industry was deregulated
Most subsidies can't exceed $200 per passenger. Without this subsidy, what is TRUE? A) There would be higher prices and fewer flights. B) There would be lower prices and fewer flights. C) There would be an increase in supply. D) There would be a decrease in demand.
Figure 4-21
Refer to . The price received by sellers after the tax is imposed is
a.
$18.
b.
$14.
c.
$12.
d.
$8.
Other things equal, the combination of a ________ saving rate and a ________ real interest rate will result in the largest accumulation of wealth over time.
A. high; high B. high; low C. low; high D. high; zero
The real value of money:
A. is another word for the face value. B. reflects the purchasing power of money. C. matters less to people than its nominal value. D. is the same as its nominal value.