The demand for a good with many substitutes is:
a. relatively elastic
b. relatively inelastic.
c. perfectly inelastic.
d. unit elastic.
a
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The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy opens to trade while the world price of a car is $6,000, and the government imposes a quota allowing 3,000 cars to be imported, then the winners are ________.
A. domestic producers and the government B. domestic producers and import permit holders C. domestic consumers and import permit holders D. domestic consumers
The money-creation process generated by an injection of reserves stops when
A. people deposit their loans into other banks. B. reserve requirements are raised. C. the increase in required reserves equals the size of the injection. D. bankers begin to fear runs and stop making loans.
Suppose that recycling rubber for sneakers creates an external benefit of $2.00 per ton of rubber. There are no external costs. The efficient amount of rubber will be recycled when the government creates a
A) subsidy of more than $2.00 per ton of rubber. B) subsidy of $2.00 per ton of rubber. C) tax of more than $2.00 per ton of rubber. D) tax of $2.00 per ton of rubber.
Quinn's income to spend each month on two normal goods, bowling or eating out, is $100. It costs $10 to bowl for the night, and it costs $20 for Quinn to eat at a restaurant. Quinn currently consumes four nights of bowling and three meals at a restaurant. If the price of bowling increased to $15, the income effect would predict:
A. Quinn would consume more of each good. B. Quinn would consume less of each good. C. Quinn would consume more bowling and less meals out. D. Quinn would consume less bowling and more meals out.