Whenever a buyer and a seller agree to trade
A) the agreement is made based on absolute advantage.
B) they must have identical opportunity costs in producing their respective products.
C) one party will always be worse off.
D) both must believe they will be made better off.
Answer: D
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How does a public good differ from a quasi-public good? In your answer give an example of each type of good
What will be an ideal response?
If those who consumed common resources were subject to a tax that was equal to the external costs that they imposed due to the negative externality created, their demand curve would shift:
A. up and they would consume more. B. down and they would consume less. C. down and they would consume more. D. up and they would consume less.
The price elasticity of demand measures the responsiveness of quantity demanded to changes in price
a. True b. False
In the short run, a sales tax is:
a. wholly absorbed by the producer. b. shared between the consumer and the producer. c. deferred until the market is able to re-establish an equilibrium price. d. wholly absorbed by the consumer.