The benefit of a subsidy will go primarily to sellers when the
a. demand for the product is highly inelastic and supply is relatively elastic.
b. demand for the product is highly elastic and the supply is relatively inelastic.
c. subsidy is legally (statutorily) granted to the seller of the product.
d. subsidy is legally (statutorily) granted to the buyer of the product.
B
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Use the figure above to answer this question. Mary is the only veterinarian in a small town and rents a space for her practice. If Mary's landlord decided to charge ________ per hour in rent, Mary would ________
A) $20 more; earn $0 economic profit B) $20 more; still earn an economic profit because she is a monopolist C) $30 more; earn $0 economic profit D) $10 less; raise her prices and earn a higher profit E) $30 more; operate on the inelastic portion of her demand curve
Assume that a consumer purchases a combination of products X and Y and MUx / Px = 75 utils per dollar and MUy / Py = 50 utils per dollar. To maximize utility without spending more dollars, the consumer should buy:
a. more of both X and Y. b. less of Y only if the price of Y increases. c. more of Y and less of X. d. more of X and less of Y. e. less of both X and Y.
If the price elasticity of demand for a good is 1, then a 3 percent decrease in price results in a
a. 0.1 percent increase in the quantity demanded. b. 1 percent increase in the quantity demanded. c. 3 percent increase in the quantity demanded. d. 4 percent increase in the quantity demanded.
The long-run aggregate supply curve is ... because along it, as prices rise, the money wage rate ...
What will be an ideal response?