"A reduction in gasoline prices caused the demand for gasoline to increase. The lower gas prices also led to an increase in demand for large cars, causing their prices to rise." These statements
a. are essentially correct.
b. contain one error; the lower gasoline prices would cause an increase in the quantity demanded of gasoline, not an increase in demand.
c. contain one error; the lower gasoline prices would increase the quantity demanded of large cars, not the demand.
d. contain two errors; the lower gasoline prices would cause the quantity of gasoline demanded (rather than the demand) to increase, and the lower gasoline price would cause an increase in quantity demanded (rather than the demand) for large cars.
B
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Suppose the government has declared beer to be an illegal substance and has imposed penalties on any person caught buying a beer. Selling a beer, however, remains legal
Using the above figure, in which CBL is the cost of breaking the law, beer consumption is decreased by A) 200 quarts. B) 300 quarts. C) 400 quarts. D) 500 quarts.
The Lost Decade refers to the years between approximately
A) 1975 and 1985. B) 1980 and 1990. C) 1987 and 1997. D) 1972 and 1980. E) 1960 and 1970.
When a firm produces and sells a refrigerator worth $1,000, its contribution to the gross domestic product (GDP) on the income side is measured by: a. the price paid by the consumer
b. the investment made by the firm to manufacture the refrigerator. c. the stock of inventories used by the firm to manufacture the refrigerator. d. the cost of raw materials used by the firm to manufacture the refrigerator. e. the sum of the wages, interest, and rent paid by the firm's owners and the profit of the firm.
Economic efficiency entails getting the smallest amount of output from a given level of input of scarce resources.
Answer the following statement true (T) or false (F)