If more is better, how can you explain that more pollution doesn't violate this principle?
What will be an ideal response?
When dealing with a "bad," we recast it as a "good." In this case, we recast "pollution" as "clean air" which then allows us to state that more is better, thus upholding our assumptions about preferences.
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The economy tends to be less stable with a __________ LM curve causing interest rates to be rather __________ to shifts in the IS curve
A) steeper; sensitive B) steeper; insensitive C) flatter; sensitive D) flatter; insensitive
A 10 percent decrease in advertising results in a 5 percent sales decrease. The advertising elasticity of demand is ________
A) -2.0 B) -0.5 C) 0.5 D) 2 E) none of the above
Refer to the accompanying figure.
Suppose Zeynep's budget constraint is initially given by BC1. If her budget constraint shifts to BC2, this could be the result of:
A. a decrease in the price of cheese sandwiches and an increase in the price of ham sandwiches. B. a decrease in the price of cheese sandwiches and an increase in income. C. an increase in the price of cheese sandwiches and a decrease in income. D. an increase in the price of cheese sandwiches and a decrease in the price of ham sandwiches.
A rightward shift of the market demand curve for drones, ceteris paribus, causes equilibrium
A. Price to increase and equilibrium quantity to increase. B. Price to decrease and equilibrium quantity to increase. C. Price to increase and equilibrium quantity to decrease. D. Price to decrease and equilibrium quantity to decrease.