The supply curve of a natural resource like oil has a positive slope because
A. the supply becomes closer to exhaustion as demand rises.
B. it becomes more costly to find and develop supplies as demand rises.
C. rents rise as output increases.
D. indirect taxes rise with output.
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Which of the following is true of the segmented markets theory?
A) It assumes that borrowers have particular periods for which they want to borrow. B) It assumes that lenders always lend for short periods. C) It provides a good explanation for why yield curves usually slope upward. D) It assumes that instruments with different maturities are perfect substitutes.
Who was Adam Smith?
What will be an ideal response?
Elasticity of demand for bus services is 0.23 for the peak hours and 0.42 for off-peak hours. The same percentage increase in price would:
A. raise revenue for peak hours but lower revenue for off-peak hours. B. raise revenues for both, but more for peak hours. C. lower revenues for both, but more for peak hours. D. lower revenue for peak hours but raise revenue for off-peak hours.