What is a barter system? The drawbacks of this system are as follows:
What will be an ideal response?
Barter is a type of trade in which goods or services are directly exchanged for other goods or services, without the use of money.(a) Difficulty of double coincidence of wants(b) Lack of common unit of value(c) Lack of a system for future payments(d) Lack of system for storage of value
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
If a good is not produced, then there is no demand for it
Indicate whether the statement is true or false
Figure 16.3Figure 16.3 depicts a market for electricity. S1 is the supply curve without the external costs. S2 is the supply curve with the $T tax. Assume electricity production incurs external costs. If the government imposes a pollution tax of $T per mega watt:
A. the equilibrium price of electricity increases but the equilibrium output decreases. B. the equilibrium price of electricity decreases but the equilibrium output increases. C. both the equilibrium price and output increase. D. both the equilibrium price and output decrease.
The business cycle phase that must come before the peak is a(n)
A. expansion. B. trough. C. recession. D. contraction.