In a perfectly competitive market, situations of surplus or shortage of a good:
A) exist till the government or any ruling authority intervenes.
B) are permanent phenomena.
C) can exist simultaneously.
D) are self-corrected due to the competitive nature of the market.
D
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A technological improvement in the production of good X causes the:
a. demand curve for X to shift to the right. b. demand curve for X to shift to the left. c. supply curve for X to shift to the right. d. supply curve for X to shift to the left.
Extraction costs of a nonrenewable resource include the:
A. cost of removal from the ground only. B. cost of removal from the ground plus the cost of preparation for sale. C. cost of removal from the ground, the cost of preparation for sale, and the cost of not being able to extract and sell the resource in the future. D. cost of removal from the ground plus replanting costs.
Because of scarcity, every economic decision involves
A. a trade-off. B. a free good. C. a trade-in. D. an increasing cost. E. a money payment.
Economists distinguish a "normal" good from an "inferior" good by focusing on
A) how a change in income effects the demand for that good. B) the good's quality. C) the good's durability. D) the good's desirability. E) all of the above.