The price elasticity of supply
a. will be positive when supply is elastic and negative when it is inelastic.
b. will be negative when supply is elastic and positive when it is inelastic.
c. will always be positive.
d. will be positive when demand for the good is inelastic.
e. will be positive when demand for the good is elastic.
C
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While corporations bear the statutory incidence of corporate income tax, the economic incidence is likely borne by:
A. shareholders. B. employees. C. customers. D. All of these likely bear some of the economic incidence.
The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth and which protects humans from ultraviolet radiation. Output of this substance has been restricted by a licensing system where producers have to bid in the open market for licenses to produce them in specified quantities. This is an example of
dealing with externalities by a. voluntary compliance. b. direct controls. c. taxes. d. the market mechanism.
Economic theory
a. is a set of definitions, postulates, and principles assembled in a manner that helps make cause-and-effect relationships clear in economics. b. is like a guidebook in that it points out what to look for. c. provides economists with a common language and way of thinking about how the world works. d. is all of the above.
Under perfect competition in the long run, price is equal to
A. marginal revenue. B. marginal cost. C. average total cost. D. All of the choices are equal to price under perfect competition.