Explain the law of demand. What does it imply about the shape of the demand curve?
What will be an ideal response?
The law of demand describes the inverse relationship between price and quantity demanded. All else equal, as the price of a good rises, the quantity demanded of the good will fall. As the price of a good falls, the quantity demanded rises. This implies that the demand curve will be downward sloping.
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When parents inoculate their children from communicable diseases prior to sending them off to school they not only provide their own children a benefit but also bestow a benefit on every other student at the school
There are now fewer students who can pass on these types of diseases. However, parents are not likely to take into account the fact that their actions create this external benefit. Therefore, economists argue that the market on its own may not provide for the optimal level of inoculations. What methods might work to get parents to take into account the external benefit when deciding whether to inoculate their children?
Trade occurs only when a country has an absolute advantage and not just a comparative advantage over another country
a. True b. False Indicate whether the statement is true or false
When the dollar appreciates, U.S
a. exports decrease, while imports increase. b. exports and imports decrease. c. exports and imports increase. d. exports increase, while imports decrease.
A paper mill discovers that burning old tires is a cheaper way to get power rather than using coal, and they adopt the new technology. Which of the following will likely happen in the market for paper?
A. The supply for paper will remain constant. B. The demand for paper will increase. C. The supply of paper will increase. D. The supply for paper will decrease.