"A reduction in gasoline prices caused the demand for gasoline to increase. The lower gas prices also led to an increase in demand for large cars, causing their prices to rise" This statement contains
What will be an ideal response?
one error; the lower gasoline prices would cause an increase int he quantity demanded of gasoline, not an increase in demand
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Economists are often perceived as disagreeing with each other. Is this the way things really are?
A. No, economists agree on much more than is commonly supposed. B. No, the problem is that some economists are smarter than others. C. No, economists “stage” disagreements for public amusement. D. Yes, economists rarely agree on much of anything. E. Yes, economists are unable to analyze problems dispassionately.
Which of the following characteristics of a competitive market make auction sites such as eBay so popular?
A) There is freedom of entry and exit. B) There are very low transaction costs. C) There are only one or two sellers. D) Buyers and sellers have complete information.
Poor countries often have difficulty investing in capital because
a. development assistance is designed in increase consumer goods. b. multinational corporations do not bring technological advances into poor countries. c. the population is living at subsistence level and cannot afford to save. d. they suffer from the cost disease of personal services.
The longer any price change lasts over time, the
A. more difficult it is to alter quantity demanded. B. the more quickly quantity demanded will return to its original level. C. more quantity demanded will change. D. the longer the short-run equilibrium will continue to be the short-run equilibrium.