Many predict there will be permanent, growing shortages of oil by the year 2025. The prognosticators are assuming
A) oil prices will fall.
B) oil prices will not adjust appropriately to coordinate the market.
C) oil prices will rise.
D) greed will ruin the supply and demand process in the world oil market.
B
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In the market for insurance, the adverse selection problem arises because
a. fair odds are different for different people, and the insurance company cannot tell who is who. b. people tend to behave more recklessly when they are insured. c. some events simultaneously affect a large number of people. d. insurance companies must tilt the odds in their favor to cover their basic operating costs.
People scalping tickets for a rock concert can sell their tickets for at least a normal profit
A. any time the rock group is popular. B. when prices are too high. C. only when there is excess supply. D. when the price set by the concert hall is less than the market equilibrium price.
When there are more substitutes for a product, the ________ for the product is ________.
A. income elasticity; greater B. demand; less price elastic C. income elasticity; smaller D. demand; more price elastic
Assuming everything else stays the same, an increase in the price of smartphones will __________ of smartphones.
a) increase the supply b) increase the quantity supplied c) decrease the quantity supplied d) decrease the supply