Suppose consumers of cigarettes can be classified into two groups: heavy users and light users. Heavy users purchase more cigarettes and are less sensitive to price changes relative to light users
To determine whether a heavy user suffers a greater loss of consumer surplus than a light user does when the price of cigarettes increases, one would need to know A) each group's average income.
B) the actual quantities purchased by each.
C) each individual's price elasticity of demand.
D) no additional information.
D
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If Terrell can produce more bagels in one day than Zori can produce in one day, then
a. Terrell has a comparative advantage in the production of bagels. b. Zori has a comparative advantage in the production of bagels. c. Terrell has an absolute advantage in the production of bagels. d. Terrell should produce bagels and Zori should spend her time on a different activity.
The supply curve for land is perfectly elastic.
Answer the following statement true (T) or false (F)
When a supply curve is constructed, data are required for price and quantity. Each point on the supply curve is
A. supply of the product. B. a quantity supplied at a given price. C. the amount that people want to buy. D. the amount people want to sell to buyers of different incomes. E. All of these responses are correct.
Which statement is false?
A. Under the United States' economic system, most of the important decisions are made in the market place. B. In the United States' economy the price mechanism determines the answers to the United States' three basic questions-what, how, and for whom. C. Most economists would agree that the price system leads to a very efficient allocation of resources. D. None of these statements are false.