Suppose caviar sales soars at the same time price increases. What would lead to both a higher quantity sold and higher price of caviar?
A. A shift in demand to the right and a larger shift in supply to the right.
B. A shift in demand to the left and a smaller shift in supply to the left.
C. A shift in demand to the left and a smaller shift in supply to the right.
D. A shift in demand to the right and a shift in supply to the left.
Answer: D
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At the beginning of the year, your wealth is $10,000. During the year, you have an income of $90,000 and you spend $80,000 on consumption. You pay no taxes. Your wealth at the end of the year is
A) $20,000.00. B) $0. C) $90,000.00. D) $100,000.00.
Demand tends to be more elastic when:
A. price is high and more inelastic when price is low. B. price is low and more inelastic when price is high. C. demand is perfectly inelastic. D. the quantity demanded is larger.
Rent seeking
a. often entails large opportunity costs. b. prevents waste of resources. c. often promotes fairness in distribution of resources. d. cannot occur in a planned economy.
A monopolistically competitive firm:
A. sometimes distinguishes its output from that of its competitors by locating in a more convenient place. B. sells products that are perfect substitutes for its competitors' products, so must compete on the basis of location. C. sells products that are close substitutes for its competitors' products, so will locate as far away from its competitors as possible. D. will be more successful the more similar its output is to its competitors' output.