From the perspective of consumers, a quota is preferred to a tariff
Indicate whether the statement is true or false
FALSE
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The diamond-water paradox of value can be explained by
A) distinguishing between total utility and marginal utility. B) water's high level of utility relative to diamonds. C) water's low price relative to diamonds. D) the fact that utility cannot be measured.
How does the substitution effect work when the price of item increases?
A. The item becomes less and less popular as price drops B. Consumers buy the cheaper item B as a substitute for item A C. Consumers buy item A even if they do not particularly want it D. The substitutes for item A also increase in price
Market demand curves are found by
A. vertically summing individual demand curves. B. horizontally summing individual demand curves. C. summing individual demand curves in a parallel fashion. D. adding the slopes of individual demand curves.
Which of the following is true of expected inflation?
a. It increases the efficiency of the economy. b. It is more of a problem than unexpected inflation. c. It results in lower prices over time as people make adjustments. d. It is not a major problem if people can make the right interest rate and income level adjustments. e. It is necessarily tied to a decline in purchasing power.