An increase in demand will increase prices most when supply is
A. elastic.
B. perfectly inelastic.
C. inelastic (but not perfectly inelastic).
D. unit elastic.
Answer: B
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A resource is defined to be:
A. something that people respond to. B. anything that can be used to make something of value. C. a good or service. D. something of value.
When overall production is taken into account, trade restrictions, such as those enacted by the Smoot-Hawley trade bill,
a. save good paying jobs. b. neither create nor destroy jobs; they reallocate them. c. increase employment in the domestic industries that are most productive. d. reduce imports, without affecting the volume of exports.
When the price of an inferior good increases,
a. both the income and substitution effects encourage the consumer to purchase more of the good.
b. both the income and substitution effects encourage the consumer to purchase less of the good.
c. the income effect encourages the consumer to purchase more of the good, and the substitution effect encourages the consumer to purchase less of the good.
d. the income effect encourages the consumer to purchase less of the good, and the substitution effect encourages the consumer to purchase more of the good.
A firm would most likely use a large advertising campaign for which of the following products?
a. flour b. bread c. celery d. iron