Government action can usually perfectly correct the market’s shortcomings.
Answer the following statement true (T) or false (F)
False
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If the government eliminates a tax on a good with a perfectly elastic supply, who benefits most?
A) buyers B) sellers C) buyers if the demand is also perfectly elastic, otherwise sellers D) buyers if the demand is unit elastic, otherwise sellers E) Buyers and sellers benefit equally.
The theory of purchasing power parity
A) extends the law of one price to a group of goods. B) assumes that most changes in nominal exchange rates are the result of changes in real exchange rates. C) assumes that inflation rates are roughly the same in most countries. D) was valid only under the gold standard.
Making decisions with outcomes are uncertain is ________ and ________.
A) common; easy B) uncommon; easy C) common; difficult D) uncommon; difficult
f the price of hairbrushes decreases by 20 percent, the quantity demanded increases by 2 percent. The price elasticity of demand is:
A. 0.1, and is elastic. B. 10 and is elastic. C. 0.1 and is inelastic. D. 10 and is inelastic.