The fact that the demand for eggs is inelastic is not surprising because
A. the supply of eggs is inelastic.
B. there are many substitutes for eggs as breakfast food.
C. they are so inexpensive.
D. the demand for food is inelastic.
Answer: C
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If the amount you owe on your house is greater than the price of the house, you have
A) negative equity in your house. B) no value to your house. C) a reverse mortgage on your house. D) a mortgage rate that is too high.
Most U.S. government spending is financed by
A. an expansion of the money supply. B. taxes. C. government securities. D. transfer payments. E. loans from foreign countries.
Which of the following is NOT necessarily true in a market equilibrium?
A. Both rich and poor have adequate access to the good. B. All mutually beneficial trades have been made. C. Price represents the cost of an extra unit of production. D. Price represents the value of an extra unit of consumption.
When producers (say, of roads) are not able to make all consumers pay for enjoying their product (i.e., the roads), they tend to see a:
A. Marginal cost of production that is too low, and there is a supply-side market failure B. Marginal benefit of production that is too high, and there is a demand-side market failure C. Marginal cost of production that is too high, and there is a supply-side market failure D. Marginal benefit of production that is too low, and there is a demand-side market failure