If the demand for good A is more elastic than the demand for good B, a small decrease in supply in both markets will cause
a. a much greater increase in price for good A than for good B
b. a much greater increase in price for good B than for good A
c. the price will increase by the same amount in both markets
d. only the price of good B will increase
e. only the price of good A will increase
B
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Refer to Figure 19-4. The equilibrium exchange rate is at A, $3/pound. Suppose the British government pegs its currency at $4/pound. At the pegged exchange rate,
A) there is a surplus of pounds equal to 600 million. B) there is a shortage of pounds equal to 200 million. C) there is a surplus of pounds equal to 400 million. D) there is a shortage of pounds equal to 400 million. E) there is a shortage of pounds equal to 600 million.
Professional organizations (for example, the American Medical Association and the American Bar Association) have been active advocates for regulation to restrict the right of professionals to advertise. Describe what economic incentives might exist for existing professionals to restrict advertising
What's the opportunity cost of taking an unfair advantage in a deal?
A. Future deals may not occur or may come at a much higher cost. B. Building a reputation for being untrustworthy if the deal is likely to be repeated. C. Probably nothing, if the transaction is only taking place once. D. All of these statements are true.
While waiting in line to buy two tacos at 75 cents each and a medium drink for 80 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, the marginal cost of purchasing the third taco would be
a. zero. b. 20 cents. c. 75 cents. d. 80 cents.