When a shortage exists in a market, sellers
a. raise price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
b. raise price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.
c. lower price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
d. lower price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.
b
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John's utility of wealth curve is shown in the above figure. He currently has wealth of $20,000. If there is a 10 percent chance that he could lose all his wealth, what is his expected wealth?
A) $0 B) $2,000 C) $17,000 D) $18,000
Many Americans are selling their used cars and buying new fuel-efficient hybrids. Other things remaining the same, in the market for used cars, ________ and in the market for hybrids ________
A. supply increases and the price falls; demand increases and the price rises B. demand decreases and the price rises; supply increases and the price falls C. both demand and supply decrease and the price might rise, fall, or not change; demand increases and the price rises D. demand decreases, supply increases, and the price falls; supply in-creases and the price falls
Regarding the price elasticities of demand, which of the following statements is true?
a. Price elasticities vary considerably from product to product b. Luxurious goods are generally less price elastic. c. Necessities are generally more price elastic. d. All of these statements are true.
Which of the following is NOT a pure public good?
A. Telephones B. Clean air C. National defense D. All of the statements associated with this question are pure public goods.