Consider two resource markets in which the demand curves slope downward. In market A, the supply curve is horizontal, equilibrium price is $6, and 100 units of the resource are hired. In market B, the supply curve is vertical, equilibrium price is $20, and 30 units of the resource are hired. Which of the following is true?
a. All of the resource earnings in market A are opportunity costs.
b. All of the resource earnings in both markets are opportunity costs.
c. All of the resource earnings in market B are opportunity costs.
d. None of the resource earnings in either market is an opportunity cost.
e. None of the resource earnings in either market is economic rent.
A
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The ratio of the percentage change in consumption of a good divided by the percentage change in income (as measured by GDP) is known as the
A) income elasticity of demand. B) income expansion path. C) demand elasticity equivalent. D) trade effectiveness.
The statement that "the rich get richer, and the poor get poorer" is supported by evidence of an expanding wage gap between high-skill and low-skill workers
a. True b. False Indicate whether the statement is true or false
What happens to equilibrium quantity when simultaneously the demand curve shifts left and the supply curve shifts right?
A. Equilibrium quantity will increase. B. Equilibrium quantity will decrease. C. Equilibrium quantity will remain the same. D. Equilibrium quantity may increase, decrease, or remain the same depending on the magnitude of the shifts in demand and supply.
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described, if the market price of hammers increased from $9 to $13:
A. Lace Hardware Hardware's producer surplus would increase by $3. B. House Depot's producer surplus would increase by $4. C. Bob's Hardware's producer surplus would remain unchanged. D. All of these statements are true.