As more firms are attracted to an industry, the supply curve can be expected to shift to the right.
Answer the following statement true (T) or false (F)
True
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Since almost all forms of transportation produce some type of pollution,
a. the government should ban all transportation. b. the government should ban all pollution. c. society has to weigh the cost and benefits when deciding how much pollution to allow. d. refrain from intervening because the market can best solve this problem.
Producers were accused of price gouging as the price of bottled water soared after Hurricane Andrew. Consumers clamored for price controls to keep bottled water at pre-Andrew levels. Use supply and demand analysis to graphically show the effect of
setting a price ceiling on bottled water after Hurricane Andrew at the pre-hurricane equilibrium price. Use your graph to assist in explaining the likely unintended effects of such a price control. Be sure that your graph is completely and correctly labeled.
Market price of any good will adjust to bring the quantity supplied and the quantity demanded into balance
What will be an ideal response?
The government is deciding where to put a $1 tax-either in a market with elastic supply and demand curves, or a market with inelastic supply and demand curves. If their aim is to raise the most revenue with the smallest deadweight loss, where should the tax be placed?
A. In the market with elastic supply and demand curves B. Since the burden is shared, it doesn't matter in which market it is placed C. It is impossible to say without more information D. In the market with inelastic supply and demand curves