The demand for diet soft drinks (as a group) is relatively inelastic because
A) there are many of them on the market.
B) there are few substitutes.
C) the purchase of a soft drink represents a large portion of a person's budget.
D) none of the above.
Answer: B
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward
The adage, "There is no such thing as a free lunch," is used to illustrate the principle that
a. goods are scarce. b. people face tradeoffs. c. income must be earned. d. households face many decisions.
Overall NAFTA has resulted in
A. Very little change in any of the three countries. B. Massive unemployment and recessions. C. Increased economic growth and employment in Mexico at the expense of the United States. D. Accelerated economic growth and reduced inflationary pressures in Canada, Mexico, and the United States.
Most economists believe that there are positive externalities in education. One can conclude that a free market would fail to give the socially optimal outcome because in comparison to the socially optimal (efficient) equilibrium, the inefficient equilibrium
A. price and quantity would be too high. B. price would be too low and quantity would be too high. C. price and quantity would be too low. D. price would be too high and quantity would be too low.