If market prices help inform individuals about the relative scarcities of goods and services, then abolishing market prices would
A) finally allow people to overcome scarcity.
B) eliminate important information.
C) abolish the dog-eat-dog mentality of market competition.
D) tend to create permanent surpluses of most goods.
E) accomplish all of the above.
B
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During the first 6 months of 2008, the United States imported more than 1.6 billion pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee
What would be a potential consequence of such a trade restriction? A) The U.S. price of coffee would increase. B) U.S. consumers would drink more coffee. C) The quantity of coffee imported into the United States would increase. D) U.S. consumer surplus from coffee would increase.
When the price of toilet paper falls by 20 percent, the quantity of toilet paper demanded rises by 10 percent. Calculate the price elasticity of demand. Is the demand for toilet paper elastic, inelastic, or unit elastic?
What will be an ideal response?
Employees at the hospital have negotiated a 3 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 5 percent over the next year, which of the following will occur?
A) Real wages for hospital employees will fall. B) The increase in inflation is expected. C) Inflation will be 3 percent the following year. D) Unemployment of hospital employees will rise.
The invention of a machine that increases milk production is discovered. If farmers were to decry the effect of this new technology on the price of milk and lobby government to set the price of milk at the price before the invention, what would be the result?
A. A decline in the price of milk B. Excess demand for milk C. Excess supply of milk D. Neither a shortage nor a surplus of milk