Many economists note that the shortage of blood in several rare types is, at least in part, attributable to the fact that the price of blood is
A. kept too high.
B. fixed at zero.
C. right at equilibrium.
D. determined by market forces.
Answer: B
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The effect that an additional user of a good or participant in an activity has on the value of that good or activity for others is called:
A. network externality. B. social externality. C. negative externality. D. private externality.
Whether a subsidy for a certain good is given to a demander or supplier is irrelevant because
a. in either case, the price that the demander has to pay will decrease; while the price the supplier receives will increase b. in either case, the price that the demander has to pay will increase; while the price the supplier receives will decrease c. either situation will create excess demand d. either situation will create excess supply e. none of these are correct
If two goods are complementary, the cross elasticity will be negative
Indicate whether the statement is true or false
When the supply of a product increases but the demand for the product remains unchanged, the equilibrium price of the product will
a. fall, and equilibrium quantity will decrease. b. be unaffected. c. first rise and then return to the original price level. d. fall, and equilibrium quantity will increase.