We know that increases in population increase the market demand for various goods. The prices of those goods will increase the most if the elasticity of supply is
a. very large
b. equal to one
c. greater than 3
d. very small
e. finite
D
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The shortage created by a rent ceiling below the equilibrium rent is smallest when the demand for housing is ________ and the supply of housing is ________
A) elastic; elastic B) elastic; inelastic C) inelastic; elastic D) inelastic; inelastic E) unit elastic; unit elastic
Explain how menu costs affect the slope of the short-run aggregate supply curve
What will be an ideal response?
A price increase for pizza will reduce the quantity of pizza demanded because it reduces a buyer's purchasing power. This is called :
a. income effect b. the alternative effect c. the substitution effect d. the normal good effect
________________ is the analysis of how the burden of a tax is divided between consumers and producers:
a. Resale incidence. b. Price incidence. c. Cost incidence. d. Tax incidence.