Following the sharp increases in oil prices in the United States caused by the OPEC oil embargo of 1973-1974, U.S. automakers started building smaller, more fuel-efficient cars. This development caused the
a. demand curve for oil to shift out.
b. demand curve for oil to shift in.
c. supply curve of oil to shift out.
d. supply curve of oil to shift in.
b
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The cross elasticity of demand measures the responsiveness of the quantity demanded of a particular good to changes in the prices of
A) its substitutes and its complements. B) its substitutes but not its complements. C) its complements but not its substitutes. D) neither its substitutes nor its complements.
Discuss the practical difficulties associated with practicing perfect price discrimination
What will be an ideal response?
Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. What is the general equilibrium price for cereal?
A. $9.76 B. $6.10 C. $0.00 D. $11.25
Which scenario best illustrates a Gini coefficient equal to one?
a. People earn the same income. b. John receives a wage of $1 per hour. c. The king ends up with all the nation's income. d. There is a one-to-one ratio of income to population. e. 100 percent of the income is held by 100 percent of the population.