Due to society's overall scarcity of resources,
a. only households are constrained by income
b. only government agencies are constrained by limited budgets
c. only business firms are constrained by the cost of buying their inputs
d. households, business firms and government agencies all face constraints
e. households and business firms face constraints, but government agencies do not
D
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Rent controls create distortions in the housing market by:
a. increasing rents received by landlords b. raising property values. c. encouraging landlords to overspend for maintenance. d. discouraging new housing construction. e. increasing the supply of housing in the long run.
the demand for ethanol is affected by the following factors (pick the best of the choices):
a) the price of corn (an input to ethanol production) b) the number of ethanol plants that produce ethanol c) a change in the technology of ethanol production d) a new regulation mandating increased use of ethanol mixed gasoline e) all of the above
If the price of a good rises by 10% and the percentage decrease in the total amount consumers spend on the good is 10%, then the good is
A. unit elastic. B. inelastic. C. elastic. D. perfectly inelastic.
Insurance can be profitable when it
A) eliminates risks. B) decreases risks. C) pools risks. D) changes the individual's marginal utility of wealth.