In a centrally planned economy
A. consumers do not have to consider prices when shopping.
B. prices are zero.
C. the government sets prices and decides how much of each good is to be produced.
D. producers have an incentive to produce those goods most desired by consumers at the lowest cost.
C. the government sets prices and decides how much of each good is to be produced.
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If a 30 percent price increase generates a 20 percent decrease in quantity demanded, then demand is
A) inelastic. B) elastic. C) unit elastic. D) perfectly elastic. E) perfectly inelastic.
If barriers to entry exist in the market for a product, then:
a. the costs of entry and exit are relatively low. b. there will be few close substitutes of the product in the market. c. firms will be incurring losses in both the short run and the long run. d. firms will tend to have relatively less monopoly power. e. the existing firms will quit the market in the long run due to mounting losses.
If the demand for steak increases as income increases, then steak is a(n):
A. normal good. B. substitute good. C. inferior good. D. complementary good.
If producers have an expectation of higher future prices, the supply of the good that is currently available:
A. will be all that is produced. B. will increase. C. will decrease. D. will not change.