B. how to distribute resources equally among all members of society. C. that people's means often exceed their wants. D. that people do not know how to rationally allocate resources
A. virtually unlimited resources to satisfy virtually unlimited wants.
B. limited resources to satisfy virtually unlimited wants.
C. unlimited resources to satisfy limited wants.
D. limited resources to satisfy limited wants.
Answer: B
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Graphically illustrate the recycled newsprint market based on the supply and demand equations given. Provide numerical labels, including the values derived in Question 1.
THE MARKET FOR RECYCLED NEWSPRINT
The amount of trash generated in the United States has risen from 88.1 million tons in 1960 to 243.0 million tons in 2009. Of this tonnage, approximately 28.2 percent is paper and paperboard. In a logical move, many communities established paper recycling programs in the 1980s. The first step was to encourage individuals and firms to bring paper wastes to collection centers. According to EPA data, as shown in the accompanying table, this recovery stage has met with some success.
*The 8.3 in 1980 represents books and magazines, which were reported in the aggregate prior to 1990.
Although these data suggest that society responded responsibly, they belie a very real problem. Many communities failed to recognize the need to create a market for recovered materials. This was precisely the problem that arose during the late 1980s and continued into the 1990s. The result was insufficient demand for recovered newspapers, and the excess supply sent the price of used newsprint plummeting.
To correct the problem, it was necessary to stimulate market demand. Virtually all levels of government took an active role. A number of state governments passed laws requiring newspapers to be partly printed on recycled paper. At the federal level, President Clinton signed Executive Order 12873, calling for all printing and writing paper to contain at least 20 percent recovered paper. (This amount was subsequently raised to 30 percent in Executive Order 13101.) The EPA established clearinghouses and hotlines to bring together suppliers and demanders of recyclables. Added influences were the thriving domestic economy and the rising demand of developing nations, whose growth required new sources of paper inputs.
Taken together, market demand eventually swamped existing supplies, and in 1995, there was a shortage of recycled newsprint. Just as predicted by economic theory, the shortage placed upward pressure on price, which rose to between $100 and $200 per ton. The boom in the market was temporary, however. By 1996, excess supplies and falling demand drove prices back to the $20 per ton level of the early 1990s.
Such volatility is characteristic of this market and continues through the present day. As a case in point, assume that the market demand for recycled newsprint in 2011 is QD = 200 – 2P and that market supply is QS = –150 + 5P, where P is the price per ton and Q is the quantity in thousands of tons per year.
The above figure shows the market for rice in Japan where price is expressed in dollars. S represents the domestic supply curve, and the horizontal line at P = $1 represents the world supply curve. Currently Q1 units are imported
The loss from shifting production from foreign to domestic producers equals A) c + e B) i. C) e. D) a + c + d + e.
Which of the following is a possible advantage of a free market condition? a. In a free market, consumers are offered discounts on the purchase of products
b. In a free market, all goods and services are offered for free to households below the poverty line. c. In a free market, continuous government intervention helps keep the price of products under control. d. In a free market, competition among sellers helps the consumers purchase a product at the lowest possible price. e. In a free market, consumers have limited products to choose from, thereby assuring less confusion and better quality.
If the economy adds to its inventory of goods during some year:
A. gross investment will exceed net investment by the amount of the inventory increase. B. this amount should be ignored in calculating that year's GDP. C. this amount should be subtracted in calculating that year's GDP. D. this amount should be included in calculating that year's GDP.