Which of the following would shift the demand curve for gasoline to the right?
a. a decrease in the price of gasoline
b. an increase in consumer income, assuming gasoline is a normal good
c. an increase in the price of cars, a complement for gasoline
d. a decrease in the expected future price of gasoline
b
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The fact that barriers to entry are low in competitive price-searcher markets means that if current firms are making economic losses,
a. these losses will remain in the long run because no firms can exit the market. b. current firms will exit the market, causing the demand curves that face the remaining firms to increase. c. new firms will enter the market, causing the demand curves that face the existing firms to decrease. d. new firms will enter the market, causing no change in the demand curves that face the existing firms in the market.
When the government implements programs such as progressive income tax rates, which of the following is likely to occur?
a. equality is increased and efficiency is increased. b. equality is increased and efficiency is decreased. c. equality is decreased and efficiency is increased. d. equality is decreased and efficiency is decreased.
The government often intervenes when private markets fail to provide an optimal level of certain goods and services. For example, the government imposes an excise tax on gasoline to account for the negative externality that drivers impose on one another. Why might the private market not reach the socially optimal level of traffic without the help of government?
The article "Samsung Stung by Apple Moves" related to the price cuts for the iPhone indicates that
A. The percentage change in the quantity demanded for the substitute cell phones was increasing less than the percentage change in the price. B. The demand for the iPhone was inelastic. C. The cross-price elasticity for iPhones and other cell phones produced by Samsung was negative. D. Apple lowered the price for the iPhone because the cross-price elasticity between it and the other competitors was positive.