Which of the following best describes scarce resources?
A) Resources that most people cannot afford to buy
B) Resources that can only be distributed efficiently by the government
C) Resources for which the quantity demanded is the same for all economic agents
D) Resources for which the quantity that people want exceeds the quantity that is freely available
D
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Your electrician accepts payment only in cash in order to avoid taxes. If you pay him $100, ________
A) the GDP of your country will increase B) the GDP of your country will remain unchanged C) the trade surplus of your country will increase D) the GDP of your country will fall
Approximately, the real interest rate ________ the inflation rate ________ the nominal interest rate
A) plus; equals B) equals; plus C) equals; minus D) minus; equals
The Federal Open Market Committee usually meets ________ times a year
A) four B) six C) eight D) twelve
The California cigarette market consists of the following supply and demand curves:
QD = 150 - 20p QS = 40p where Q is the number of packs of cigarettes per year (in millions!), and p is the price per pack. a. Compute the market equilibrium price and quantity. b. Calculate the price elasticities of each curve at the equilibrium price/quantity. c. California imposes a tax on cigarettes of $0.90 per pack. Suppliers pay this tax to the government. Compute the after-tax price and quantity. How much do suppliers receive net of tax (per pack)? d. Demand for cigarettes is generally more elastic over longer periods of time as consumers have more time to kick the habit. What does this imply about the tax incidence in the long run as compared to the short run?