Which of the following illustrates government acting as a referee?
a. taxing high income persons
b. enforcing contract provisions between buyer and seller
c. buying new weapons for defense
d. mailing checks to social security recipients
e. collecting data on imports and exports
b
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In a graph of choice sets, a price change causes the slope of budget lines to change.
Answer the following statement true (T) or false (F)
Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states. In the market for gasoline
A) the demand curve shifted to the left resulting in a decrease in the equilibrium price. B) the supply curve shifted to the left resulting in an increase in the equilibrium price. C) the demand curve shifted to the right resulting in an increase in the equilibrium price. D) the supply curve shifted to the right resulting in an increase in the equilibrium price.
The relevant market is defined as the set of goods whose
a. price elasticities of demand are low b. cross elasticities with other goods outside the set are high c. price elasticities of demand are high d. income elasticities of demand are high e. cross elasticities with other goods in the set are high
Advances in production technology typically reduce firms' costs, which increases the quantity supplied at each price
a. True b. False Indicate whether the statement is true or false