Added expenditures in the circular flow that are not paid for out of domestic resource income are known as
a. leakages.
b. injections.
c. imports.
d. infusions.
b. injections.
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Marvin loves chocolate truffles. As the price of a chocolate truffle increases from $1 to $2 to $3, Marvin continues to buy a dozen chocolate truffles every week. Marvin's demand for chocolate truffles is ________
A) elastic B) unit elastic C) illustrated by a horizontal demand curve D) perfectly inelastic
With barriers to the entry of new firms
A) a cartel is guaranteed to earn an economic profit greater than zero. B) a cartel's members have no incentive to cheat. C) the cartel will likely earn an economic profit greater than zero. D) industry supply will expand if the firms form a cartel.
In your environmental economics study group, a friend argues that using taxes to control pollution is not efficient because, even with taxes, a positive amount of pollution is still produced. Do you agree?
What will be an ideal response?
Restaurants and retail stores often give 10% senior citizen discounts. Use the concept of elasticity to explain how this can be profit maximizing behavior.
What will be an ideal response?