Suppose a change takes place and the new equilibrium is at point A in the above figure. This change could have been caused by
A. an increase in the per-unit tax on DVDs.
B. a reduction in the price of DVD players.
C. a reduction in the wages paid to workers in the DVD industry.
D. a decrease in the income of consumers.
Answer: A
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Suppose that when one person consumes a good, it is possible to provide it to others at no additional cost. Such a good is called
a. nonexcludable. b. nonrivalrous. c. a free good. d. a Clarke good.
Consider the indifference maps shown above. If X and Y are perfect substitutes, your indifference curves between them would look like those in
A) Figure A. B) Figure B. C) Figure C. D) Figure D.
If left to market forces, activities that produce external benefits wil be over-produced
a. True b. False
Foreign exchange markets are markets wherein the goods of international trading partners are exchanged
Indicate whether the statement is true or false