The elasticity of demand for a normal good:
a. is often higher in the short run than in the long run.
b. is often lower in the short run than in the long run.
c. is the same in the short run as in the long run
d. is zero in the short run and infinite in the long run.
b
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One reason why adverse selection problems arise in the market for health insurance is because
A) sick people are more likely to want health insurance than are healthy people. B) fewer people are choosing careers in the medical field because of increases in the cost of education. C) as people live longer, a greater portion of their medical bills will have to be paid by younger generations. D) advances in medical technology are costly, and drive up the price of medical insurance.
"Education in elementary and high schools has external benefits because families who have a lot of children do not pay any more than families without children." Is this statement correct or incorrect? Explain your answer
What will be an ideal response?
Which of the following statements about the marginal rate of substitution is NOT correct?
A) It measures the number of units of the good on the horizontal axis that a consumer must be compensated with to give up a unit of the good on the vertical axis, while remaining on the same indifference curve. B) It is measured by the slope of the indifference curve. C) It decreases in value when moving downward along a typical-shaped indifference curve. D) It is constant for goods that are perfect substitutes.
The notion of utilitarian justice is that
A. any change that makes some people better off without making anyone worse off should be undertaken. B. income should be distributed so that the well-being of the worse-off member of society should be maximized. C. income should be distributed according to an individual's needs. D. through income redistribution, the rich sacrifice a little and the poor gain a lot.