If demand and supply have the same elasticity, the buyer will pay _____ of a tax.
Fill in the blank(s) with the appropriate word(s).
half
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If the production of oranges reduces global warming, then the equilibrium quantity of oranges will be ________ the socially optimal quantity.
A. higher than B. equal to C. more valuable than D. lower than
You explain to your roommate Surya, who makes beaded headbands, about an economic theory which asserts that consumers will purchase more of a product at lower prices than they will at higher prices
She contends that the theory is incorrect because over the past two years she has lowered the price of her headbands and yet has seen a decrease in sales. How would you respond to Surya? A) I will explain to her that she is making the error of reverse causality: it is the decrease in demand that has caused her to lower her prices. B) Surya is right; she has evidence to back her claim. The theory must be erroneous. C) Surya is making the mistake of assuming that correlation implies causation. D) I will explain to her that there are some omitted variables that have contributed to a decrease in her sales such as changes in income.
Regulation might NOT increase total surplus because
A) the costs of the regulation might outweigh the benefits. B) it may not be possible to gather the information necessary to set prices correctly. C) regulators might get captured by the industry. D) All of the above.
The supply of loanable funds comes from anyone who has saved money and wants to lend it out
a. True b. False Indicate whether the statement is true or false