A situation in which there is a reduction in quantity supplied to zero when there is the slightest decrease in price is
A. perfectly elastic demand.
B. perfectly elastic supply.
C. perfectly inelastic demand.
D. perfectly inelastic supply.
Answer: B
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Consider two countries: A and B. In country A there are well-defined private property rights and in country B there are no private property rights
If the institutions hypothesis holds: a) Which of the two countries is likely to grow faster? b) Is the slower growing economy permanently disadvantaged?
John paints the exterior of his house and, as a result, his neighbor Christine is able to sell her home for $5,000 more than she could have before. John's house painting:
a. creates a negative externality for Christine. b. shows John is a free rider. c. results in an efficient market outcome for both. d. creates a positive externality for Christine. e. was poorly done.
Direct government regulation is generally preferable to altering market incentives for correcting pollution problems.
Answer the following statement true (T) or false (F)
Related to the Economics in Practice on p. 83: The true cost of the Shakespeare in the Park tickets is
A. the additional cost to the city of extra security. B. $0 plus the opportunity cost of the time spent in line. C. the cost to put on the performance. D. zero.