Refer to the above figure. At a price of $2 per gallon, there is
A. a shortage of 40,000 gallons per week.
B. a shortage of 80,000 gallons per week.
C. a shortage of 60,000 gallons per week.
D. a surplus of 20,000 gallons per week.
Answer: C
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Unlike markup pricing, the strategy of price discrimination is totally independent of the price elasticity of demand for the good in question
Indicate whether the statement is true or false
In the 1930s, some nations such as the United States and Britain abandoned their gold pegs by adopting ________, whereas other nations such as Germany and South American nations adopted ________.
A) floating exchange rates and open capital markets; fixed exchange rates and capital controls B) fixed exchange rates and open capital markets; floating exchange rates without capital controls C) fixed exchange rates and closed capital markets; floating exchange rates and closed capital markets D) floating exchange rates with closed capital markets; floating exchange rates and open capital markets
Exhibit 5-1 Demand curve
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If demand price elasticity is 2, consumers would:
A. buy twice as much of the product in response to a 10 percent decrease in prie. B. require a 2 percent drop in price to increase their purchases by 1 percent. C. buy 2 percent more of the product in response to a 1 percent decrease in price. D. buy twice as much of the product in response to a 1 percent decrease in price.
An externality is:
A. always a benefit to the recipient. B. always a detriment to the recipient. C. an activity that occurs in a business which is unknown to management. D. unintended benefits or costs imposed on third parties as a result of economic activity.