Demand shows
a. the various quantities people are willing and able to buy at various prices, ceteris paribus.
b. the various quantities people are able and willing to buy at various prices.
c. the various prices people face when buying.
d. how much people buy at one specific price.
a. the various quantities people are willing and able to buy at various prices, ceteris paribus.
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The figure illustrates the market for chairs. If the supply of chairs increases, the price of a chair ________ $40 and the quantity ________
A) will rise above; demanded will decrease B) will rise above; supplied will increase C) will fall below; demanded will increase D) will fall below; demanded will decrease
By common definition, a recession occurs when
A) the international deficit worsens for at least two successive quarters. B) the government budget deficit exceeds the national debt. C) the inflation rate exceeds 3.5 percent. D) real GDP decreases for at least two successive quarters.
Sometimes the government deals with externalities by creating laws to regulate behavior instead of using taxes to correct the market failure. So, requiring auto manufacturers to install a device called a catalytic converter which removes some toxins from exhaust may be preferable to a gas tax that reduces driving levels. This route is often preferred because:
a. c and e. b. it requires less technological development. c. it doesn't penalize drivers of clean cars. d. only car drivers pay for the externality. e. the cost of the externality is unknown.
Protection provided to the infant industries is rarely withdrawn because:
a. the costs of withdrawing protection outweigh the benefits. b. the industries begin to experience diseconomies of scale. c. it leads to a loss of government revenue. d. the industries produce goods which are close substitutes of the imported goods. e. the larger and more successful the industry becomes, the more political power it wields.